In response to recent articles published online regarding questionable advertising expenses found by COA amounting to P59 million, the NNC would like to shed light on the COA findings in the interest of transparency. Negative comments from netizens on the articles has prompted the NNC to issue this article to clarify the COA findings for the information of its clients, contractors and the public in general.

The article cited the COA findings that transactions amounting to Php59,127,596.05 were not supported by official receipts as found in its 2018 annual audit report of the NNC. The NNC received on 07 May 2019 the Commission on Audit Observation Memorandum No. 2019-012 dated 30 April 2019 regarding the absence of documentary evidence or Official Receipts (OR) for paid advertising expenses in 2018.

The NNC would like to clarify that these transactions were paid to the contractors through Advise to Debit Account (ADA) as required under DBM Circular Letter No. 2013-16 dated 23 December 2013. This means that once contractors have been able to deliver or comply with requirements, the NNC prepares the necessary payment vouchers and deposits payment directly to the bank accounts of contractors. Unlike before when payments were made through checks, contractors would immediately provide the official receipt upon receipt of the check. Under the ADA process, the NNC has to coordinate with the contractors for submission of the official receipt. The NNC has internal processes that includes the follow-up of contractors who are also advised when the deposit is made to their accounts. Most of the contractors however do not immediately submit the official receipts, thus the COA findings. NNC realized that it failed to keep a copy of the ADA for COA to be informed that payments have indeed been made to its contractors.

Since the receipt of the COA memo, the NNC was able to generate official receipts equivalent to 97 percent of the amount of paid transactions (equivalent to Php57,243,500.05 of the Php59,127,596.05) and have submitted these to COA as of 26 July 2019. The NNC will continue to follow-up the remaining contractors to submit official receipts to NNC to comply with audit rules and regulations. The NNC also now provides COA with copy of the ADA.