Report on the Audit of Typhoon Yolanda Relief Operations

8/11/2019 Report on the Audit of Typhoon Yolanda Relief Operations

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2014

Commission on Audit

REPORT ON THE AUDIT

OF TYPHOON YOLANDA RELIEF OPERATIONS


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TABLE OF CONTENTSPage No.

List of Abbreviations

I. Introduction

The Importance of Disaster Risk Reduction and Management (DRRM)The Philippine Disaster Profile and Status of Major DisasterOccurrencesEvolution of Disaster Related Statutes and Regulations Current State of Disaster Management SystemThe National Disaster Risk Reduction and Management Plan(NDRRMP)Sources of Funds

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II. An Overview of the Yolanda Disasterand Government Efforts in its AftermathBefore the StormThe Catastrophic TyphoonThe AftermathGovernment Response Post-Yolanda

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III. The Special Audit of the Relief Operations for Typhoon YolandaVictimsCOA Resolution No. 2013-024Ocular Inspection and Process DocumentationDevelopment of Visual PresentationData Gathering on Actual Grants and Donations for Yolanda VictimsCreation of Audit TeamsAudit InstructionsDifficulties of the AuditWhat We FoundRecommendationsEndnotes

IV. Highlights of the Audit Findings and Recommendations by Agency

Department of Social Welfare and Development (DSWD)Department of Public Works and Highways (DPWH)Department of Health (DOH)Office of Civil Defense (OCD)

Department of Interior and Local Government (DILG) National Food Authority (NFA)

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20212121222324252729

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LIST OF ABBREVIATIONS

AFP Armed Forces of the PhilippinesBDC Barangay Development CouncilBLGS Bureau of Local Government SupervisionBSP Bangko Sentral ng PilipinasCAF Certificate of Availability of FundsCCA Climate Change AdaptationCCAC Climate Change Advisory CommitteeCDP Comprehensive Development PlanCDRRMC City Disaster Risk Reduction and Management CouncilCFO Commission on Filipinos OverseasCHD Center for Health DevelopmentCOBAC Central Office Bids and Awards CommitteeCOMELEC Commission on ElectionsCSC Civil Service CommissionCSO Civil Society OrganizationsDA Department of AgricultureDBM Department of Budget and ManagementDENR Department of Environment and Natural ResourcesDEO District Engineering OfficeDepEd Department of EducationDFA Department of Foreign AffairsDILG Department of Interior and Local GovernmentDND Department of National DefenseDOE Department of EnergyDOF Department of FinanceDOH Department of HealthDOJ Department of JusticeDOLE Department of Labor and EmploymentDOST Department of Science and TechnologyDOT Department of TourismDOTC Department of Transportation and CommunicationsDPWH Department of Public Works and HighwaysDRRM Disaster Risk Reduction and ManagementDRRROO Disaster Risk Reduction and Response Operation OfficeDSWD Department of Social Welfare and DevelopmentDTI Department of Trade and IndustryEO Executive OrderFAiTH Foreign Aid Transparency HubFFP Family Food PackFO Field Office

FY Fiscal YearGAA General Appropriations ActGPPB Government Procurement Policy BoardGSIS Government Service and Insurance SystemIEC Information, Education and CommunicationLCE Local Chief ExecutiveLDRRMC Local Disaster Risk Reduction and Management CouncilLDRRMF Local Disaster Risk Reduction and Management FundLDRRMFIP Local Disaster Risk Reduction and Management Fund Investment Plan


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LDRRMO Local Disaster Risk Reduction and Management OfficeLGU Local government unitLINKAPIL Lingkod sa Kapwa PilipinoMDRRMC Municipal Disaster Risk Reduction and Management CouncilMICT Manila International Cargo TerminalMMD Materials Management DivisionMMDA Metropolitan Manila Development AuthorityMOA Memorandum of AgreementMOOE Maintenance and other Operating Expenses NAMRIA National Mapping and Resource Information Authority NCR National Capital Region NDCC National Disaster Coordinating Council NDRRMC National Disaster Risk Reduction and Management Council NDRRMF National Disaster Risk Reduction and Management Fund NDRRMP National Disaster Risk Reduction and Management Plan NEDA National Economic and Development Authority NFA National Food Authority NGO Nongovernmental organization NIA National Irrigation Authority NROC National Relief Operations CenterOCD Office of Civil DefenseOP Office of the PresidentOSEC Office of the SecretaryPAGASA Philippine Atmospheric, Geophysical and Astronomical Services AdministrationPARR Presidential Assistant for Rehabilitation and RecoveryPCSO Philippine Charity Sweepstakes OfficePD Presidential DecreePDRRMC Provincial Disaster Risk Reduction and Management CouncilPDRRM-2010 Philippine Disaster Risk Reduction and Management Act of 2010Phivolcs Philippine Institute of Volcanology and Seismology

PNP Philippine National PolicePRC Philippine Red CrossPS Personal ServicesQRF Quick Response FundRA Republic ActRD Regional DirectorRDCC Regional Disaster Coordinating CouncilRDRRMC Regional Disaster Risk Reduction and Management CouncilRDS Relief Distribution SheetRIS Requisition and Issue Slip SARO Special Allotment Release OrderSRR Search, Rescue and Retrieval

SSS Social Security SystemTOS Tally out sheetTESDA Technical Education Skills Development AuthorityWSI Warehouse Stock Issued


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I INTRODUCTION

The Importance of Disaster Risk Reduction and Management (DRRM)

Disaster is a serious disruption of the functioning of a community or a society involvingwidespread human, material, economic or environmental losses and impacts, which exceeds theability of the affected community or society to cope using its own resources. Disasters are oftendescribed as a result of the combination of: the exposure to a hazard; the conditions ofvulnerability that are present; and insufficient capacity or measures to reduce or cope with the potential negative consequences. Disaster impacts may include loss of life, injury, disease andother negative effects on human, physical, mental and social well-being, together with damage to property, destruction of assets, loss of services, social and economic disruption and environmentaldegradation. 1 It has two categories, namely, natural and man-made.

Natural disasters are major adverse events resulting from natural processes of the earth orwhat is known as acts of God which cause widespread destruction of lives and properties. Itssubgroups and definition are presented below:

Table 1. Natural disaster subgroup definition and classification Disaster

Subgroup Definition Disaster Main Types

Geophysical Events originating from solid earth Earthquake, Volcano, MassMovement (dry) (e.g. Landslides)

Meteorological Events caused by short-lived/small to meso scale

atmospheric processes (in the spectrum fromminutes to days)

Storm (e.g. Typhoons, Monsoons)

Hydrological Events caused by deviations in the normal watercycle and/or overflow of bodies of water caused bywind set-up

Flood, Mass Movement (wet) (e.g.Tsunami, Storm Surge)

Climatological Events caused by long-lived/ meso to macro scale processes (in the spectrum from intra-seasonal tomulti-decadal climate variability)

Extreme Temperature, Drought,Wildfire (e.g. El Nio, La Nia)

Biological Disaster caused by the exposure of livingorganisms to germs and toxic substances

Epidemic, Insect Infestation,Animal Stampede

Source: Annual Disaster Statistical Review 2012:The Numbers and Trends

On the other hand, man-made disasters are influenced by humans and they are often a resultof negligence and human error among other factors.

According to the World Risk Report of 2012, the Philippines ranked 3 rd out of 173 countries based on exposure to hazards (Figure 1). Disaster can strike anytime, anywhere. It can cause


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0 5 10 15 20 25 30

Haiti

Bangladesh

Japan

Russia

India

Afghanistan

Indonesia

Philippines

United States

China P Rep

Climatological Geophysical Hydrological Meteorological

irrevocable damage to life and property if the right measures are not put in place. This can also bring out the best and the worst in human nature. The manner in which action is taken in responseto the crisis goes a long way in determining how people fare from the experience. Hence, the needfor DRRM.

Figure 1. Top 10 countries by number of reported events in 2011

Source: Annual Disaster Statistical Review 2012: The Numbers and Trends

DRRM is the systematic process of using administrative directives, organizations, andoperational skills and capacities to implement strategies, policies and improved coping capacities inorder to lessen the adverse impacts of hazards and the possibility of disaster. Prospective DRRMrefers to risk reduction and management activities that address and seek to avoid the development

of new or increased disaster risks, especially if risk reduction policies are not put in place.2

The Philippine Disaster Profile and Status of Major Disaster Occurrences

The Philippines lies on the Pacific Ring ofFire, where about 80% of the worlds largestearthquakes occur. It is situated along two major plates of the world the Eurasian and PacificPlates. The countrys location makes it morelikely to be hit by natural disaster such asvolcanic eruptions, earthquakes, typhoons,tsunamis and tornadoes. Data from the NationalDisaster Coordinating Council (NDCC) revealsthat an average of 20 quakes occurs per day in thecountry. About 100 to 200 earthquakes are feltevery year and in the last 400 years, the countryhas experienced 90 destructive earthquakes.

There are 300 volcanoes that can be found in the Philippines, 22 of which are active. Its

Source: http://www.htekidsnews.com


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36,289-kilometer coastline is vulnerable to tsunamis. Furthermore, the Philippines is located alongthe typhoon belt on the North Pacific Basin in the Pacific where 75% of typhoons originate. Anaverage of 20 to 30 typhoons hit the country per year, 5 to7 of which can be destructive. Theeastern sea board is highly exposed to typhoons with wind speed of 200kph. Some 25% oftyphoons of such high wind speed in the world occur in the Philippine area of responsibility. From

1970-2009, annual average direct damage to disasters ranged from P5 billion to P15 billion(US$100 million to US$300 million), indirect and secondary impacts further increase this cost.Cost of direct damage is equivalent to more than 0.5% of the national gross domestic product. Theannual average of casualties due to natural disasters is 1,002. Flooding is considered the topmostdisaster in the country in the last five (5) years.

In a study conducted by World Bank in2008, the country was identified as a naturaldisaster hot-spot with approximately 50.3% ofits total area and 81.3% of its population

vulnerable to natural disasters. In the 2012World Risk Report published by the United Nations University Institute for Environmentand Human Security (UNU-EHS), thePhilippines Risk Index of 27.98% ranked thirdamong disaster-prone countries worldwide(Table 2).

Table 2. 2012 World Risk Index

Source: UNU-EHS

Rank Country Risk (%)1 Vanuatu 36.312 Tonga 28.623 Philippines 27.98

4 Guatemala 20.755 Bangladesh 20.226 Solomon Islands 18.157 Costa Rica 17.388 Cambodia 17.179 Timor-Leste 17.13

10 El Salvador 16.89

Table 3.Top 10 Natural Disastersin the Philippines(1900 to 2013)

Disaster Date No. of PeopleKilled

Earthquake 16/08/1976 6,000

Storm 05/11/1991 5,956

Earthquake 16/07/1990 2,412

Storm 04/12/2012 1,901

Storm 29/11/2004 1,619

Storm 13/10/1970 1,551

Storm 15/12/2011 1,439

Storm 01/09/1984 1,399

Storm 30/11/2006 1,399

Volcano 31/01/1911 1,335

Source: "EM-DAT: The OFDA/CRED International DisasterDatabase

For the period 1900 to 2013, the MoroGulf Earthquake on August 16, 1976 ranked No. 1 among natural disasters that hit thePhilippines with a death toll of 6,000 people(Table 3). That earthquake claimed thousandsof casualties because it happened just aftermidnight when most people were sleepingand it spawned a great tsunami which struckthe coasts from different directions andcaught the people unaware.


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Table 4.Top 10 Natural Disasters in thePhilippines(1900 to 2013) sorted by numberof total affected people

Disaster Date Total No. ofPeople

Affected

Storm 04/12/2012 6,246,664

Storm 12/11/1990 6,159,569

Storm 24/09/2009 4,901,763

Storm 21/06/2008 4,785,460

Storm 29/09/2009 4,478,491

Flood 06/08/2012 4,451,725

Storm 21/10/1998 3,902,424

Storm 27/09/2006 3,842,406

Storm 20/11/1973 3,400,024

Storm 21/10/1988 3,250,208

In terms of the total number of peopleaffected, typhoon Pablo (international name:

Bopha) on December 4, 2012, got the highestnumber with a total of 6.2 million (Table 4).

Pablo smashed into Mindanao fromthe Pacific Ocean with gusts of up to 210kilometers an hour. It made landfall thrice inthe Philippines: first in Baganga, DavaoOriental on December 4, 2012 at around 4:45a.m. and then at the southern part ofDumaguete City, Negros Oriental at 5:30

p.m. of the same day, losing practically noneof its strength and in the following day, at8:00 a.m., it made landfall again in Roxastown in Palawan.

Table 5.Top 10 Natural Disasters in the Philippines(1900 to 2013) sorted by economic damage costs

Disaster Date Damage(000 US$)

Storm 04/12/2012 1,692,961

Flood 04/09/1995 700,300

Storm 29/09/2009 585,379

Storm 12/11/1990 388,500

Earthquake 16/07/1990 369,600

Storm 24/09/2011 344,173

Storm 21/06/2008 284,694Storm 18/10/2010 275,745

Storm 03/11/1995 244,000

Storm 21/10/1988 240,500

Source: "EM-DAT: The OFDA/CRED International DisasterDatabase

For the period 1900 to 2013, typhoon

Pablo registered the highest catastrophic costamounting to US$1.69 billion (Table 5).

With more than 7,000 islands and over36,000 kilometers of coastline, thePhilippines remains highly vulnerable to theimpacts of natural disasters, including theglobal phenomenon of climate change.Because of global warming, environmentaldegradation, high population density and

poverty conditions, the impact of naturaldisasters in the country have become highlysevere.


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Evolution of Disaster Related Statutes and Regulations

The Philippine government, from its pre-Commonwealth days up to the present, has evolveda scheme to counteract the effects of disasters, both natural and human-induced. PresidentialDecree (PD) 1566 entitled "Strengthening the Philippine Disaster Control, Capability and

Establishing the National Program on Community Disaster Preparedness," issued on June 11,1978, is the country's basic law on disaster management. It lays down the policy, institutional andoperational framework for the disaster risk management system in the country. 3

From this legal mandate, the National Calamities and Preparedness Plan approved in 1983was revised and issued in August 1988 together with the Implementing Rules and Regulations ofPD 1566.

Efforts have been made since the mid-1990s to update and amend PD 1566 after itsenactment. In response to the high risk levels of disasters, the Philippine government has enacted

two legislations relating to existing and projected climate change impact: the Climate Change Actof 2009 and Republic Act (RA) 10121 or the Philippine Disaster Risk Reduction and ManagementAct of 2010 (PDRRM-2010).These twin laws on DRRM have common goals and objectives: toincrease resilience of communities and the country against natural disasters and reduce damageand losses due to disasters. 4

Regulations on DRRM-related activities have been and are being issued by agencies such asthe Department of Budget and Management (DBM) and Commission on Audit (COA) for those pertaining to fiscal matters, the Department of Interior and Local Government (DILG) and LocalGovernment Units (LGUs) for those pertaining to DRRM of LGUs, and the Department of Social

Welfare and Development (DSWD) for disaster response activities.

Current State of Disaster Management System

The Governance Structure on DRRM

The National Disaster Risk Reduction and Management Council (NDRRMC) 5 or formerlycalled the NDCC, is an agency under the Department of National Defense (DND), responsible forensuring the protection and welfare of the people during disasters or emergencies.

RA 10121 provided an expanded membership to the previous NDCC from 19 to 44members (Figure 2). The former NDCC, as chaired by the DND Secretary, was composed ofCabinet Secretaries and Heads of Agencies with major contributions to disaster response. The newlaw transformed the NDCC to the NDRRMC, which is still headed by the DND but with four (4)Vice-Chairpersons, namely: the Department of Science and Technology (DOST) Secretary fordisaster prevention and mitigation, the DILG Secretary for disaster preparedness, the DSWDSecretary for disaster response, and the Director-General of the National Economic andDevelopment Authority (NEDA) for disaster rehabilitation and recovery.


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Aside from membership of government agencies, the NDRRMC now includes financialinstitutions, local government leagues, the private sector and civil society organizations (CSOs)which reflects the Whole of Society app roach on disaster management.

Figure 2.Expanded Membership of the NDRRMC Under RA 10121

The NDRRMC is supported by a network of DRRM Councils (Figure 3).

Figure 3. DRRM Council Networks

The structure of the NDRRMC is replicated in all regions. Local Disaster Risk Reductionand Management Councils (LDRRMCs) Provincial, City, and Municipal Levels have theirown councils formed and chaired by their respective Local Chief Executives (LCEs).

O L D N D C C : 1 9 M e m

b e r s

Chairman: Secretary, DND

Members:

Secretary, DILG Secretary, DPWH Secretary, DOH Secretary, DSWD Secretary, DA Secretary, DepEd Secretary, DOF Secretary, DOLE Secretary, DTI Secretary, DOTC Secretary, DOST

Secretary, DBM Secretary, DOJ Secretary, DENR Director, PIA Sec-Gen - PNRC Chief of Staff, AFP A,OCD: Exec Offr/Member

N E W

N D R R M C : 4 4 M e m

b e r s

Chairperson: Secretary, DND

Vice-Chairpersons:

Sec, DOST Prevention &

Mitigation

Sec, DILG Preparedness

Sec, DSWD Disaster Response

DG, NEDA Rehab & Recovery

Exec Dir: OCD Administrator

Members: 39

14 Depts: DOH, DENR, DA, DepEd, DOE,DOF, DTI, DOTC, DBM, DPWH, DFA, DOJ,DOLE & DOT

12 govt agencies: OES OPAPP, CHED AFP,PNP, OPS, NAPC, PCW, HUDCC,

CCC, PHILHEALTH & OCD

2 Gov Financial Inst (GSIS & SSS) 1 Quasi-government agency (PRC) 5 LGU Leagues 4 Civil Society Organizations 1 Private Sector Organization


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4 PriorityAreas w/ 4Long Term

Goals

14Objectives

24Outcomes 56 Outputs 93 Activities

At the barangay level, the Barangay DRRM Committee is assumed by the existing BarangayDevelopment Council (BDC).

The Regional Disaster Risk Reduction and Management Council (RDRRMC) 6 is tasked tocoordinate, integrate, supervise and evaluate the activities of the LDRRMC. It is responsible in

ensuring disaster sensitive regional development plans and in case of emergencies shall convenethe different regional line agencies and concerned institutions and authorities.

The LDRRMC is responsible in taking the lead in preparing for response and recovery fromthe effects of any disaster based on the following criteria:

The BDC, if a barangay is affected; The City/Municipal DRRMC, if two or more barangays are affected; The Provincial DRRMC, if two or more municipalities are affected; The Regional DRRMC, if two or more provinces are affected; and National DRRMC, if two or more regions are affected.

The NDRRMC and intermediary LDRRMCs act as support to LGUs, being in the frontlineand having the primary responsibility of responding to disaster. The NDRRMC and LDRRMCsset the coordination mechanisms and policies for the private sector and civil society groups. 7

The National Disaster Risk Reduction and Management Plan (NDRRMP)

The NDRRMP for 2011-2028, approved on February 7, 2012, is the road map on howDRRM shall contribute to sustainable development (Figure 4). It fulfills the requirements of

PDRRM-2010 and provides details on programs and projects to be pursued, timelines to be metand lead agencies and groups who have the responsibility as well as the resources needed forimplementation.

Likewise, it stipulates the DRRM approaches and strategies to be applied to manageidentified hazards and risks. The roles of agencies, their responsibilities and lines of authority atall levels of government are also identified.

The Plan provides the vertical and horizontal coordination mechanism in pre-disaster and post-disaster activities.

Figure 4.The National Disaster Risk Reduction and Management Plan

Significantly, it includes a system for monitoring and evaluation of programs.


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The four priority areas are prevention and mitigation; disaster preparedness; disasterresponse; and rehabilitation and recovery (Figure 5).

Figure 5.DRRM Priority Areas and Long-Term Goals

The projects under the four priority areas are as follows :

Table 6. Scope of the DRRM Priority AreasPrevention and Mitigation Preparedness

Development of alarm and early warningsystems

Nationwide flood forecasting andmonitoring

Geo-hazard mappings Comprehensive land use planning,

building and safety standards Engineering interventions Flood control structures

Contingency planning Enhancement of operation and coordination centers

Organizing, training and equipping responders Organizing and mobilizing community volunteers Conduct of disaster trainings and drills Prepositioning of equipment and supplies LCEs DRRM roles and responsibilities Commitment to DRRM action Regional DRRM Summit on July and August 2013 Newly-elected LCEs on board Craft Local DRRM Plans by October 01, 2013

Response Recovery and Rehabilitation

Search, rescue and retrieval (SRR)operations

Humanitarian aid, relief and healthservices

Provision for temporary shelter, water,sanitation and hygiene

Setting- up One -Stop- Shop Management of evacuation centers Financial assistance to calamity victims

Post Disaster Needs Assessment Reconstruction of damaged houses and buildings Resettlement/Relocation Provision for livelihood Restoration and improvement of destroyed facilities

Disaster Prevention and MitigationAvoid hazards and mitigate their

potential impacts by reducingvulnerabilities and exposure and

enhancing capacities of communities

Disaster PreparednessEstablish and strengthen capacities ofcommunities to anticipate, cope andrecover from the negative impacts ofemergency occurrences and disasters

Disaster Response

Provide life preservation and meet thebasic subsistence needs of affected

population based on acceptablestandards during or immediately after a

disaster

Disaster Rehabilitation and Recovery

Restore and improve facilities, livelihoodand living conditions and organizational

capacities of affected communities, andreduced disaster risks in accordance with

the building back better principle

Safer, adaptive and disasterresilient Filipino communities

towards sustainable development


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Sources of Funds

At present, the country has disaster risk financing windows: (1) the National DRRM Fund(NDRRMF) or the Calamity Fund in the General Appropriations Act (GAA); (2) the LocalDRRM Fund (LDRRMF); (3) the Government Service Insurance System (GSIS), a government-owned insurer providing catastrophe insurance coverage for government-owned assets; and (4) thePeoples Survival Fund. Funds also come from private, donations, endowment s, grants andcontributions.

The NDRRMF is used to fund disaster risk reduction activities and capital expenditues for pre-disaster operations, rehabilitation and other related activities in the following order of priorities:8

Priority 1 - For urgent and emergency relief operations, health services, settlement andrehabilitation of affected populations, as well as the emergency repair and rehabilitation ofvital infrastructures and lifelines damaged by a disaster or calamity;

Priority 2 -For repair, rehabilitation and reconstruction of other damaged infrastructures orfacilities which are not emergency in nature but are necessary for disaster mitigation; and

Priority 3 - For pre-disaster activities outside the regular budgets of line agencies and proposed capital expenditures for pre-disaster operations.

Under the Special Provisions of the 2013 GAA, requests for Calamity Fund must beendorsed by the NDRMMC to the Office of the President for approval. Upon the Presidents

approval of the requests, the DBM releases the funds directly to the implementing agencies.

In times of disasters of great magnitude, the NDRRMC also receives donations eitherthrough the OCD, DOH or DSWD. Most of the time, donated funds have specific intents and purposes. For instance, financial assistance given to bereaved families and immediate relief andearly recovery requirements are sourced from donated funds.

From 2010 to 2012, a total of P9.434 billion NDRRMF was released to national agenciesand LGUs, excluding infusions from official development assistance. For fiscal year (FY) 2013,the appropriated amount for the NDRRMF or the Calamity Fund in the national governments

approved budget amounted to P7.5 billion. The breakdown of the special purpose fund is asfollows:


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Table 7. Calamity Fund Appropriations for FY 2013

Source: GAA, FY 2013

As of July 31, 2014, 99% of the total Calamity Fund for FY 2013 has already been releasedas indicated in Table 8.

Table 8. Calamity Related Resources Expenditures and Releases, FY 2013 (As of July 31, 2014)

Agencies AmountMOOE Capital Outlay Total

DOH 0 500,000,000 500,000,000DILG 467,732,486 467,732,486DND 0 8,000,000 8,000,000

DPWH 0 2,976,576,027 2,976,576,027DSWD 3,466,166,189 0 3,466,166,189LGUs 22,000,000 9,950,000 31,950,000

Total 3,955,898,675 3,494,526,027 7,450,424,702Source: www.dbm.gov.ph

The Quick Response Fund (QRF) is a portion of the NDRRMF or Calamity Fund pre-allocated to concerned national government agencies as standby fund for response, relief andrehabilitation programs in areas affected by disasters and calamities occurring during the budgetyear (and even in the prior year) in order to normalize the situation and living conditions in theseareas as quickly as possible. The QRF allocation is lodged under the budgets of the agenciesenumerated below:

PurposePersonalServices

Maintenance andOther Operating

Expenses (MOOE)CapitalOutlays TOTAL

1. Aid relief and RehabilitationServices to Communities/AreasAffected by Calamities, includingTraining of Personnel, and OtherPre-disaster Activities

0.00 2,650,000,000 0.00 P2,650,000,000

2. Repair and Reconstruction ofPermanent Structures including,Capital Expenditures for Pre-disaster Operations,Rehabilitation and other RelatedActivities

0.00 800,000,000 4,050,000,000 P4,850,000,000

TOTAL 0.00 3,450,000,000 4,050,000,000 P7,500,000,000


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Table 9. Quick Response Fund Allocation by Agency

Agency Amount 1. DSWD- Office of the Secretary (OSEC) P662,500,000.002. DND - OCD 530,000,000.003. DND - OSEC 352,500,000.00

4. DPWH - OSEC 600,000,000.005. DepEd - OSEC 550,000,000.006. DA - OSEC 500,000,000.007. DA-National Irrigation Administration (NIA) 500,000,000.00

TOTAL P3,695,000,000.00

Source: GAA, FY 2013

One significant difference between the Calamity Fund and the QRF is that the QRF may beused or released without the NDRMMCs endorsement or the Presidents approval. But when theseagencies QRF get depleted, they must request DBM for replenishment and seek t he approval of thePresident.


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II AN OVERVIEW OF THE YOLANDA DISASTER

AND GOVERNMENT EFFORTS IN ITS AFTERMATH

Before the Storm

Two days before the fateful day when super typhoon Yolanda(international name: Haiyan) made its first landfall in the

Philippines, both thePhilippine Atmospheric, Geophysical andAstronomical Services Administration (PAGASA) and the NDRRMC have already issued warnings and advisories on itsunusual strength and potential dangers. PAGASA had trackedYolandas path for days and raised storm signal warnings inseveral areas in the Visayas, Mindanao and even in Luzon.

On the other hand, the NDRRMC, through the DILG, had directedall mayors and governors in the Bicol Region, Eastern and WesternVisayas, and Region IV-B to activate their local DRRMCs,

monitor the situation in their areas of responsibility, make thenecessary precautionary measures and warn the communitiesthrough the local media, especially the local radio station, aboutthe imminent danger posed by the typhoon. The NDRRMCemphasized proactive actions, that is, evacuation instead of rescueoperations, and its ultimate aim of zero casualties.

Other government agencies have also mobilized their resources aswell as their regional and field offices in preparation for thetyphoon:

DOH prepositioned P350,885,321 worth of assorted drugs,medicines, medical supplies, cot beds, and other essentialmaterial;

DSWD prepositioned P178.383 million worth of goods or89,260 food packs; coordinated with several LGUs in the pre-emptive evacuation of their constituents to identifiedevacuation centers; and started repacking operations in the National Relief Operations Center (NROC) in Pasay;

Around 4,500 Armed Forces of the Philippines (AFP)

troops from various units in Leyte and Samar were placedon red alert; three C-130 Air Force cargo planes and 32military helicopters and planes were on standby, along with20 navy ships;

In Region VIII, more than 6,453 policemen and supportunits were placed on red alert, with five trucks and sixwatercraft available for their eventual use; and


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Some 1,022 fire trucks of the Bureau of Fire Protection andlocal governments had been put on heightened alert and 36ambulances and 22 rubber boats were on standby.

The ca tas t roph ictyphoon

Despite all the warnings, preparations and precautionary measuresundertaken before Yolandas landfall, no one had foreseen theferocity and magnitude of its destruction. Yolanda definitely livedup to its billing as the strongest typhoon to ever make landfall inrecorded history. It is also the most devastating tropical cyclonethat struck the Philippines in recent memory.

The Category 5 typhoon made its first landfall over Guiuan,Eastern Samar in the early morning of November 8, 2013 andwreaked havoc, primarily on the Visayas region, until its exit fromthe Philippine area of responsibility the following day.

Weather officials said Yolanda had sustained wind speedsexceeding 185 kph when it made landfall. The strong winds rippedoff the roofs of thousands houses and knocked down shanties,trees, power and telephone lines and cell towers. Storm surgewaves as high as 6 to 7 meters or a two-storey high building, werealso seen, claiming thousands of lives and destroying millionsworth of property.

The Aftermath

Eight months removed from Yolandas landfall, the hardest hit

areas in Eastern Visayas are still struggling to get back on their feetagain. The typhoon has undoubtedly left a deep and massive crater-size physical and socio-economic destruction as well as untoldemotional trauma among the people.

According to an April 17, 2014 NDRRMC update, more than 3.4million families or 16 million people, spread across 12,139 barangays in 44 provinces, 591 municipalities and 57 cities ofRegions IV-A, IV-B, V, VI, VII, VIII, X and XI and CARAGAhave been affected by Yolanda. A total of 4 million people have

also been displaced by the typhoon.

Yolandas death toll has reached 6,300 as of 17 April 2014, whilethe number of injured stood at 28,689 and 1,061 are still missing(Table 10).


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In terms of economic damages, NDRRMC has pegged the totallosses at almost P89.6 billion, with P9.5 billion for infrastructuresand P21.8 billion for the productive sectors (agriculture,manufacturing, etc.) in Regions IV-A, IV-B, V, VI, VII, VIII andCARAGA.

Table 10. Effects of Typhoon Yolanda in the Philippines

CASUALTIES

Region Dead Injured MissingCALABARZON (IV-A) 3 4 0MIMAROPA (IV-B) 19 61 24Bicol Region (V) 6 21 0Western Visayas (VI) 294 2,068 27Central Visayas (VII) 74 348 5Eastern Visayas (VIII) 5,902 26,186 1,005Zamboanga Peninsula(IX)

1 1 0

CARAGA (XIII) 1 0 0Total 6,300 28,689 1,061

DAMAGESSector Amount

in PH in US$InfrastructureProductiveSocialCross-sectoral

9,584,596,305.6921,833,622,975.0955,110,825,740.69

3,069,023,613.41

216,210,158.03491,416,227.21

1,240,396,708.1069,075,480.83

Total 89,598,068,634.88 2,017,098,574.17

SOURCE: Data gathered from the last update by NDRRMC as of April 17, 2014. [2] Exchange rate as of 17 April 2014, P44.43=$1

GovernmentResponse Pos t - Yolanda

The scale and magnitude of Yolandas destruction satisfied the criteriaor condition required for declaration of a state of calamity under NDCC Memo Order no. 04 series of 1998 dated March 4, 1998. Thuson November 11, 2013, President Aquino declared a State of NationalCalamity through Proclamation No. 682 that aimed to hasten therescue, recovery, relief and rehabilitation efforts of the governmentand the private sector, including international humanitarian aid.Government agencies and LGUs immediately mobilized their ownresources and facilities for the massive rescue, recovery, relief andrehabilitation operations.


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To facilitate the governments di saster response, the GovernmentProcurement Policy Board (GPPB) approved GPPB Resolution No.34-2013 on November 14, 2013 which: 1) reiterated that GPPBapproval is not necessary for government contracts of less than P500million; 2) granted the authority to all concerned government entities

to procure goods and infrastructure projects through NegotiatedProcurement for contracts with Approved Budget for the Contract of atleast P500 million, for the purpose of rescue, recovery, relief and/orrehabilitation during the State of National Calamity; and 3) required allconcerned government agencies to submit a list of transactions covered by said authority at the end of every month.

Within a week after the onslaught of Yolanda, the NDRRMC reportedin its Nov. 15, 2013 bulletin the following concerted actions of somekey government agencies:

a. National DisasterRisk Reduct ionand ManagementCounci l(NDRRMC)

Assessed needs and damages at all levels Drafted Memorandum Order No. 60 wherein the

Department of Finance (DOF) Secretary is designated asthe overall coordinator for the preparation of all relief packs/goods prior to their distribution to the affectedlocalities; the Director General of the Technical EducationSkills Development Authority (TESDA) is designated asco-coordinator; and the Secretary of Department ofTransportation and Communications (DOTC) is designated

as coordinator for all transportation and other logisticalneeds in connection with the distribution of relief packs/goods. All other departments, agencies, bureaus, andoffices of the Government are ordered to coordinate withthe said officials on any matter related to the relief andrecovery efforts on the affected areas.

Activate d a One -Stop Shop on November 12, 2013, tofacilitate the acceptance of the influx of donations from theinternational community (countries and organizations) afterthe declaration of national state of calamity.

b. Department o fSocial Welfareand Developm ent(DSWD)

Mobilized 2,238 volunteers at NROC in repacking familyfood packs as of 14 November 2013.

Airlifted 540 family food packs to Tacloban City on board aC130 of the AFP on November 9, 2013.

Prepositioned P206.58 million worth of emergency reliefresources consisting of standby funds (P66.18 million);


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115,448 food packs (P31.06 million) and other food andnon-food items (P109.33 million) readily available foraugmentation.

Established Donations Desks at national and regionallevels.

Established partnership with Corporate Social Responsibilityarms of private companies (i.e. 7-Eleven, LBC, PALFoundation, etc.) as drop-off points for donations in-kind.

Facilitated foreign donations under PresidentialMemorandum Order (PMO) 36.

c . Depar tment ofPubl ic Works andHighways(DPWH)

Road Clearing Operation Teams cleared roads alongnational highways temporarily obscured/disrupted.

Prepositioned heavy equipment in strategic areas for possible clearing operations.

Deployed DRRM Teams and maintenance point persons atstrategic locations, particularly identified road sections prone to landslides and flooding.

d. Depar tment ofHealth (DOH)

Provided medical assistance worth P1,157,504.95 in theform of medicines, drugs, surgical instruments and financialassistance to different hospitals and health offices in theregion (Center for Health Development or CHD IV-B).

Assigned Rapid Assessment Teams and Surveillance Teamsin six provinces; Stationed medical and surgical teams atBicol Regional Training and Teaching Hospital (BRTTH)and Bicol Medical Center; assigned four medical teams forevacuation centers.

e . Arm ed Forces ofthe Phi l ippines(AFP)

Provided logistical support and manpower to haul and preposition relief items.

Prepositioned Disaster Response Tactical Group andresponse equipment.

Deployed servicemen and trained volunteers to augment for possible evacuation and rescue operations.

f . Phil ippineNational Police(PNP)

Activated Disaster Incident Management Task Groups andRegional Provincial/City/Municipal Tactical OperationsCenters to provide security assistance in the communitiesvacated by residents and in evacuation centers; and in thedelivery, packing and distribution of relief goods to theaffected areas.


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Assisted in the transportation of 325 families from Aklan;3,195 families from Capiz; 405 from Iloilo; 32 from IloiloCity; and 598 from Negros Occidental during the conduct of pre-emptive evacuation.

g. Depar tment ofAg ricu lture (DA)

Conducted regular coordination with LGUs and other reliefagencies; undertake constant market monitoring; and openedits warehouses for relief operations and palay procurement.

h. Depar tment ofTranspor ta t ionandCommunica t ions(DOTC)

Ensured readiness of personnel and equipment at theMactan-Cebu International Airport Authority and CebuPorts Authority.

i . National FoodAuth or i ty (NFA)

Ensured availability of rice stockpile to support area ofresponsibility for two weeks (NFA IV-A).

Activated and deployed data gathering teams, agencycoordinating teams and price monitoring teams (NFA IV-B).

j . Dep ar tm en t o fEducat ion(DepEd)

All schools designated as evacuation sites and personnel toassist in evacuation were on standby alert.

k. Depar tment of

Labor andEmploymen t(DOLE)

Allotted P2.5 million for emergency employment of workers

affected by the typhoon (Region VI).

l . Department ofTrade andIndu str y (DTI)

Organized the Diskwento Caravan in Ormoc City, Leyte on14 November 2013.

m. Depar tment ofFore ign Affa i rs

(DFA)

Had set up a Coordinating Unit for typhoon Yolanda tofacilitate offers of aid coming from foreign governments,

sent either through the concerned Foreign Service Post ortheir diplomatic missions in Manila, as well as compile allinformation on international assistance. The CoordinatingUnit provided required information or directed queries tothe concerned action office or government agency related but not restricted to the following:


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o Landing permits of aircrafts bringing in reliefgoods and equipment;

o Entry of medical missions and search-and-rescueteams;

o Donations, in cash or in-kind;o Entry of goods, medicines and equipment; ando Visa concerns for humanitarian workers.

The Foreign A idTransparencyHub (FAiTH)

(Screen captured fromhttp://www.gov.ph/faith .)

In response to the worldwide appeal for humanitarian aid, fundsfrom different sources and all corners of the world started pouringin for Yolanda victims and survivors. To track the status of foreignaid coursed through government agencies like the DSWD and the NDRRMC, President Aquino launched FAiTH on November 18,2013, an online portal of information on calamity aid and

assistance pledged or given by countries and intergovernmentalorganizations, as well as donations coursed through theCommission on F ilipinos Overseas (CFO) Lingkod sa KapwaPilipino (LINKAPIL) program. It can be accessed throughhttp://www.gov.ph/faith .

Screen captured from http://www.gov.ph/faith .

As of August 19, 2014, the portal has recorded a total ofP71,010,446,819.82 or $1,626,032,076.66 of foreign aid pledges.

Of this amount, P44.2 billion or $1 billion are cash pledges, whileP26.9 billion or almost $615 million are non-cash pledges.

There are four government agencies (DSWD, OCD, DOH and theCFO) who are contributing information on the donationschannelled through the DFA, which are uploaded to this website.


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FAiTH

More than just arepository of data, FAiTH is

our way of expressing

gratitude to all those whohave reached out to the Filipino people at this

tragic time andareaffirmation of our

administrationscommitment to true public

service.

Foreign government grants or donations are coursed through thePhilippine embassies that send Note Verbale to the DFA on the pledges made by donor countries. Not all pledges materialized intoactual donations as others have remained as mere pledges. Onlydonations received by government agencies are monitored by the

DOF; donations directly given to LGUs are not included. Pledgesof foreign aid coursed through nongovernment organizations(NGOs), such as the Philippine National Red Cross (PNRC) orother international aid agencies can also be recorded in the portal, but cannot be tracked. Overseas and local donations wired directlyto NGOs, UN instrumentalities and private entities andfoundations are also not included in this portal.

At present, there is no single agency that is actually monitoring thereceipt and utilization of funds received as donation or grants for

calamity victims.

The FAiTH Task Force is composed of representatives from theDBM, CFO, DOF, DOH, DFA, DSWD, NEDA, OCD, Office ofPresidential Spokesperson, Presidential Management Staff and thePresidential Communications Development and Strategic PlanningOffice. The COA has also agreed to provide advisory support tothis initiative.


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III THE SPECIAL AUDIT OF RELIEF OPERATIONSFOR TYPHOON YOLANDA VICTIMS

COA Issuance

The purpose of an audit is to ensure transparency andaccountability in the use of resources. By the nature of the job

of auditors, they already face numerous significant challengesas they perform their tasks. What more when they conduct adisaster audit and they themselves are calamity victims?

In ensuring transparency, immediate reporting is necessary andevery transaction is recorded in a book of accounts open toanyones scrutiny. In the name of accountability, documentaryrequirements are necessary. Seeking approvals, testing theaccuracy of the inventory and observing procedural controlsare but some of the many mechanisms of accountability. But

how does one fully satisfy all of these in the midst of anemergency?

Accountability controls and mechanisms ensure that resourcesare used appropriately for valid purposes. Following acatastrophic disaster, decision-makers face a tension betweenthe demand for rapid response and recovery assistance including assistance to victims and at the same time,implementing appropriate controls and accountabilitymechanisms.

In the case of the COA, we have barely started with our projecton Enhancing the Audit of Disaster Funds when typhoonYolanda struck without sparing our own people and ourRegional Office in Tacloban. While we have started with thedevelopment of the accounting guide, we have not exposed thedraft to disaster-related agencies and thus, we could notimmediately release the guidelines. However, we are ready toconduct the audit, given our experience and learning developedthrough the years especially during our active participation in

the INTOSAI Working group on Accountability and Audit ofDisaster Funds.

With the massive scale and urgency of the governmentsrescue, recovery, relief and rehabilitation efforts and the hugeamounts involved, the Commission on Audit immediatelyresponded and issued COA Resolution No. 2013-024 on


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November 20, 2013.The said resolution required the immediate post-audit of the rescue, relief, recovery and rehabilitationefforts and activities during the period of the State of NationalCalamity.

Ocular inspection andprocess documentation

From November 19-21, 2013, a Project Team, in coordinationwith the officials of COAs National Government Sector,conducted an ocular inspection and process documentation ofthe relief operations being implemented at that time in certainservice centers in Metro Manila for typhoon Yolanda survivors.These activities resulted in the issuance of an unnumberedmemorandum dated November 26, 2013 which showed the process flow of relief operations in service centers located inthe National Capital Region (NCR), for the information andreference of the audit teams in the monitoring of relief

operations.

Development of a visualpresentation

To help COA auditors and partner organizations understandeach stage of the relief operations, the special project team prepared a visual presentation on the process flow of the reliefoperations, including the designated service centers for typhoonsurvivors and other beneficiaries.

Data gathering onactual grants anddonations for Yolandavictims

One of the critical elements in the special audit of disaster aid pertaining to typhoon Yolanda is the availability, reliability and

quality of financial information on disaster funds.Accountability is enhanced when donors report theircontributions, and receipts and activities relating to disaster aidare recorded in a standardized and transparent reporting formatto complete the picture of the receipt, implementation andaccounting of donor funds.To facilitate the solicitation and consolidation of the necessaryinformation on aid inflow and distribution, the Project Teamsent a letter dated November 28, 2013 with an attachedtemplate for completion to the following development partners

and/or donors:- Asian Development Bank- Australian Agency for International Development

(AusAID)- Canadian International Development Agency (CIDA)- European Union- United Nations Development Programme (UNDP)


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- United States Agency for International Development(USAID)

- World Bank

In response to the informal survey, the USAID has confirmed

that as of December 23, 2013, it has donated $20 million intotal, including administrative support costs, to the governmentthrough DSWD and to different private and NGOs to financethe logistics, relief commodities, shelter and settlements andhumanitarian coordination. In addition, $10,064,440.00 has been released to the World Food Programme for EmergencyFood Assistance.

Also, the European Union has confirmed giving financialcontribution for a total of EUR 122,238,000 as of November

22, 2013. This amount was released to different private andnon-government agencies. A share of the financial contributionwas also given to the NDRRMC as well as in-kind donations.

Creation of Audit Teams On November 21-22, 2013, the Project Manager initiated aseries of meetings and consultations with COA officials for thecreation of audit teams that will monitor DSWD reliefoperations in NCR and Regions VI-VIII. These meetings andconsultations resulted in the issuance of the following officeorders:

COA Office Order Nos. 691 and 693 both dated November 25, 2013, creating a steering committee,secretariat and audit teams to conduct the monitoringof DSWD relief operations in NCR and Regions VI-VIII

COA Office Order Nos. 692 and 694 dated November25 and November 26, 2013, respectively, directingselected officials and employees of COA to travel toRegions VI, VII and VIII to perform the followingtasks:

- Conduct a briefing to identify initial auditareas, gather audit issues and ensureuniformity of audit procedures;

- Mobilize and introduce the audit teams whowill conduct the special audit; and

- Coordinate with partner professionalorganizations that will join the citizens


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participatory audit and help ensureimmediate action on transactions intendedfor the survivors of typhoon Yolanda.

- Conduct site visits and inspections to comeup with an agreed audit plan.

Audit Instructions

Audi t Scope

Audit Per iod

Focus Areas in Audi t

Agencies Includedin the Audi t

The special audit covered relief operations during the State of National Calamity, under Proclamation No. 682, s. 2013, particularly in the Provinces of Samar, Leyte, Cebu, Iloilo,Capiz, Aklan and Palawan.

The audit was undertaken during the period of the State of National Calamity.

The audit teams were instructed to focus on these subjects:

Sources and receipt of foreign aid Release of local funds by DBM, the Office of the

President, the NDRMMC and other agencies involved Inter-agency transfer of funds Procurement and logistics Distribution of goods and services

The national agencies included in this Special Audit Report arethe following:

DSWD DPWH DOH OCD DILG NFA

Difficulties in the Conduct of Audit

Existing processes for confirming that donations received are allaccounted for were insufficient. Given the many sources ofdonations, majority of which were not coursed throughgovernment agencies, there was no way to track the flow of aid.


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There are n o means to analyze a disaster victims eligibility forassistance as documentary requirements are not considered due tothe urgency of need. Given the long queues for food packs,auditors could no longer require the presentation of eligibilitydocuments or even identification cards due to the massive

destruction that included loss of records and documents, not tomention the condition of the victims themselves who had not eatenfor days.

While it is important to ensure that prices were fair and reasonable,the extent of damage created by the super typhoon resulted to avery high demand for basic relief goods like noodles, therebyresulting to artificial price increases.

The challenge therefore lies in developing the blend of skills

necessary to assure that disaster funds are adequately protectedwithout preventing the speedy response or timely delivery of aid tothe victims.

Simultaneous observations of the processes in procurement,repacking and distribution were carried out by deploying teams tothe different repacking centers and operation centers in the affectedareas nationwide. Auditors of disaster related agencies wereinstructed to immediately conduct a post-audit of all disasterrelated transactions given the nature of the relief goods, and therelaxation of some controls during the state of calamity.

While the presence of our teams seemed to be unwelcome to thevarious officers busy in attending to disaster response, they werethere in various warehouses with or without electricity, so as toensure that every cent spent in order to save lives is completely protected. While there are social workers designed to cater to theneeds of the homeless, hungry and despondent, there are alsoauditors out in the field to check on the conditions of the goods,assess audit conditions and document every stage of the processflow until the relief goods reach those who needed them most.


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WHAT WE FOUND

Unuti l ized/Lowuti l izat ion of funds

The government and relief organizations need money before theycan operate and effectively respond to those in need. It is a fact,however, that aid only starts to flow in, in times of disaster. Whilethe law has amply provided for much needed resources, we view itwith concern that calamity funds remain unutilized both at thelevel of selected national and local government units.

Proced ural lapses/def ic iencies inaccount in g for receiptand ut i l izat ion offunds

Procurement andContract ing Issues

Docum entat ion andrecording issues

Even in times of catastrophic disaster, one cannot discount thesignificance of controls and other accountability mechanisms forthey ensure the proper use of much needed resources. However,decision makers often find themselves trapped in a struggle between implementing controls and accountability mechanismsand the demand for rapid response and recovery assistance. On onehand, our audit documented many examples wherein quick actionwas not possible due to longstanding policies/procedures thatrequired extensive, time-consuming processes, delaying thedelivery of vital supplies and other assistance.

On the other hand, we also found examples where processes under procurement and distribution of relief goods to disaster victims leftthe government to possible abuse of expedited transactions. In thecase of DOH, the correctness of recorded issuances of goods andequipment in the amount of P36,912,764.06 or 39% of the totaldistributions/issuances of P93,620,188.54 could not besubstantiated because this was not confirmed to have been received by the concerned Auditors of the DOH Regional Offices. Weobserved that procurement contracts were not conducted through public bidding due to the urgency of need and yet, significantamount of items procured remained undistributed even monthsafter they were purchased.

In the case of DSWD Field Office (FO) VI, the system theyadopted in relief distribution did not provide daily and periodicreporting on the results/status of its operations as well asaccounting of funds received and its utilization.

Lapses were noted in the documentation and recording of donatedcash/relief goods and movement of supplies from warehouses weresometimes done without accompanying approved supportingdocuments. There are discrepancies between accounting andreporting of family food packs (FFPs) between warehouse


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Management ofInventory, suppl iesand warehousing,issues

Loading, shipm entsand logis t icsmanagement issues

Delays/non-deliveryof goods

personnel and DSWD employees. It is very difficult to establishactual inventories given the following circumstances:

Drop -off points of shipment not indicated in the tally outsheet (TOS) for FFP releases to DSWD FO VIII, hence portof entry cannot be verified;

Requisition and Issue Slip (RIS) not attached to some TOS;

Standard DSWD forms not used to document movement ofgoods for proper monitoring.

It should be noted that a reliable inventory is crucial in thedetermination of the volume of relief goods to be ordered as wellas timeliness in placing orders. An accurate inventory alsocontributes to a sound analysis of distribution of relief assistancewhich eventually can guide critical decision making during disasterresponse.

Most agency officials are too afraid to violate the law or at theleast incur the possibility of a certain transaction being disallowed.A lot of the conditions created by the aftermath of the typhoon areunexpected and therefore awaiting a new set of guidance. The bureaucratic structure and reliance on written guide permeate thedifficult situation of being able to respond immediately. The natureof relief goods, majority of which are perishable, the conditions ofthe victims and the limitations where agents of the government

operate, double the difficulty of responding to a huge calamitysuch as typhoon Yolanda. What is saddening is while there is anincreasing need for the government to spend its resources, whichare readily available, they can hardly trickle down to thesucceeding levels of government in order to reach the victims because state actors are either too reluctant to act if there are norules or they insist on following longstanding procedures as if thereare no emergencies.


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Establ ish an Effect iveInventory ManagementSystem

Improve theTimel iness of the

Acquis i t ion andDistr ibut ion of Rel iefGoods

fundamental control procedures that must remain enforced. Also,making use of a pro-forma documentation to effectively monitorthe movement of goods from production stage up to the delivery ofgoods to the affected areas will supplement these controls.Requiring an explanation from concerned/responsible officials for

the variances and unreconciled balances is another factor that willhelp ensure accountability.

With the flow of in-kind donations, proper inventory managementis indispensable in making sound analysis in the distribution ofrelief goods. Management of inventory, supplies and warehousingissues will immediately be addressed if an effective inventorymanagement system is established. For instance, separateresponsible person/s may be assigned to handle the receiving,distribution and recording of goods to avoid incompatible duties

among accountable persons. Moreover, it would be helpful torequire the Accountant to record the unutilized in-kind donations.Also, monitor and control stock movement by coursing alldonations through the inventory account and recording issuancesas they occur to facilitate timely consolidation and closemonitoring of the movements of inventories.

Lastly, the bulk of the issues encountered in our audit is the delayand non-delivery of goods. It must be noted that loading andshipment issues are not only related but also part and parcel of the

underlying cause of the delivery problems. Some have claimed thatthe reasons behind these issues are the longstanding proceduresthat must be followed prior to the execution of the delivery ofrelief goods in the affected areas notwithstanding the fact that mostof the relief goods are of a perishable nature. To address theseissues, concerned agencies must improve the planning of theirdisaster response activities giving due regard to foreseeabledisasters/calamities to come up with a policy or guideline on thetimely acquisition and distribution of food items, medicines andthe like which are perishable in nature.


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Endnotes

1 Section 3(h), PDRRM Act of 2010 (Republic Act No.10121)2 Section 3(o), PDRRM Act of2010 (Republic Act No.10121)3http://www fao.org4 National Progress Report on the Implementation of the Hyogo Framework for Action (2009-2011) March 27,20115 Section 5, RA No. 101216 Section 10, RA No. 101217 Section 15, RA No. 101218 NDCC Memorandum No. 2, Series of 1999


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INTRODUCTION

The DSWD plays a vital role in the comprehensive NDRRMP crafted for the years 2011 to2028 pursuant to the requirement of RA 10121. DSWD was tasked as the overall lead or focal

agency for Disaster Response. Under this thematic area, it is expected that, in times of disaster,there is a well-established disaster operations. An adequate and prompt assessment of needsand damages at all levels is necessary. There should also be an integrated and coordinatedsearch, rescue, and retrieval capacity. Temporary shelter and psychological needs of directlyand indirectly affected population should be adequately addressed. Also, basic social servicesare expected to be provided to affected population (whether inside or outside evacuationcenters) and, a coordinated and integrated system for early recovery should be implemented.

As Vice-Chair for disaster response, the DSWD is tasked to provide continuous technicalassistance and resource augmentation to disaster-affected LGUs and through intermediaries,

such as support for food, non-food items, cash-for-work, financial aid to families and/orindividuals in crisis situation, shelter assistance (emergency or permanent shelter), livelihoodsupport, construction of bunkhouses, mobile kitchen, psychosocial interventions, counsellingand others.

In adherence to the mandate bestowed, the DSWD, in response to OP MemorandumCircular No. 57 dated November 15, 2013 , Directing all Department Secretaries and Heads ofAgencies, Bureaus, or Office of the Government, including Government-Owned andControlled Corporations, and Authorizing and Encouraging LGUs, to mobilize their respectiveemployees in the Relief and Rehabilitation Efforts in Response to the Calamity Arising from

Typhoon Yolanda, established 16 Relief Operation Centers in NCR and Regions VI, VII, andVIII.

DRRM FundOn the basis of the aforementioned issuances, various government agencies mobilized

their resources and employees to undertake massive recovery, relief and rehabilitation effortsto assist the families and communities affected by typhoon Yolanda.A comparative data onallotment and obligation for calendar years (CYs) 2012 and 2013 is presented below:

Table 11. Comparative allotment and obligation, DRRM Fund (in million P)

Year Allotment Obligation Balances

2012 2,088.061 1,801.174 286.887

2013 13,747.671 10,081.684 3,665.987

Part of the allotment and obligation in CY 2013 pertains to Yolanda Relief Operationsamounting to P5,404,510,106.25 and P4,996,422,499.24, respectively, details as shown below.


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Table 12. Summary of Fund Releases (in million P) for Yolanda Relief Operations

AllotmentandObligationby Region

SARO Reference No. and Amount

B-13-01252dated Nov.

14, 2013

BMB-B-13-0025902

dated Dec. 27,

2013

B-13-01323dated Dec.

27, 2013

BMB-B-13-0011623

dated July

26, 2013

B-13-01324dated Dec.

27, 2013*

B-13-01355dated

Dec. 27,2013

Total

Allotment:

OSEC P1,569.713 1,766.360 953.490 4289.563 NCR 19.938 0.210 20.148IV-A 5.000 5.000IV-B 15.000 15.000V 77.859 77.859VI 130.870 384.020 0.418 515.308VII 88.500 217.807 76.972 383.279VIII 10.100 10.100X 18.500 18.500XI 42.754 42.754XII 13.500 13.500CARAGA 13.500 13.500

Total 2,005.234 602.037 76.972 0.418 1,766.360 953.490 5,404.511

Obligation :OSEC 1,552.517 1,766.360 953.490 4,272.367 NCR 19.938 0.210 20.148IV-A 5.000 5.000IV-B 15.000 15.000V 77.859 77.859VI 130.870 0.418 131.288VII 88.500 210.935 76.972 376.407

VIII 10.100 10.100X 18.500 18.500XI 42.754 42.754XII 13.500 13.500CARAGA 13.500 13.500

Total 1,988.038 211.145 76.972 0.418 1,766.360 953.490 4,996..423Balance 17.196 390.892 0.00 0.00 0.00 0.00 408.088

In addition, the following tables show the cash (Table 13) and in-kind donations (Table 14)which were received from local and foreign sources. The unutilized balance of the cashdonations is deposited to an authorized government depository bank.

Table 13. Summary of Receipt and Utilization of Cash Donations

Sources Receipt Utilization BalanceCash Donations

Local P 70,923,065.05 P3,880,000.00 P 67,043,065.05Foreign 669,254,686.47 -- 669,254,686.47*

Total P740,177,751.52 P 736,297,751.52

* Amount in dollar currency is $15,255,986.20


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Table 14. Summary of Receipt and Utilization/Distribution of In-Kind Donations as of December 17, 2013Source Storage Particulars Remarks

Local DonationsVarious DSWD-

OSEC Food and Non-Food Transferred at NROC

Donors from

Region IV-A

JY & Sons,

CupangWarehouse,MuntinlupaCity

Local donations of

food and Non-Food

Released 14 container vans to DSWD FO VI-

Iloilo City as of Jan. 2, 2014, except for usedclothing which were transferred to NROC; Only12 container vans were noted Received as ofJan. 21, 2013 by the Regional Field OfficeAuditor No. VI

Donors from NCR DSWD - NROC

Food and Non-Food Still at the DSWD-NCR storage, NROC PasayCity

Foreign DonationsGovernment ofQatar

World CitiCollegesWarehouse

80MT of medicines,food, tents, blankets,and clothes

Still stored at World Citi Colleges Warehouse

Embassy of thePhilippines in the

Kingdom of Thailand

JY and SonsCompound

Mobile Meal(ready-to-eat)

Released to DSWD FO VI. Part of the 14container vans with only 12 containers vans noted

as Received as of Jan. 21, 2013 by the RegionalField Office Auditor No. VI.

Myanmar DefenseServices, theRepublic of theUnion of Myanmar

JY and SonsCompound

Food and medicines Released to DSWD FO VI. Part of the 14container vans with only 12 containers vans notedas Received as of Jan. 21, 2013.

Cargolux Airlines,Luxembourg

NinoyAquinoStadium

10,840 kg. of charityshipment (assorted Non-Food Items

Shipped and distributed to Yolanda victims inTacloban City

Embassy of thePeople's Republicof BangladeshManila, Philippines

NinoyAquinoStadium

Food, non-food,drinking water,toiletries

Shipped and distributed to Yolanda Victims atTacloban City

Mead Johnson Nutrition(Thailand) Inc.

NROC Enfagrow A+ 3UHT RTD Vanilla180 ml

Still at the DSWD-NROC storage

Ministerio deRelacionesExteriores dePanama, Republicof Panama

NROC Life Straw Family Still at the DSWD-NROC storage

Hyogo PrefecturalGovernment, Japan

NROC Diapers, MilkBottles, AntisepticTablets, AntisepticCases, EmergencyFood

Still at the DSWD-NROC storage

Sanyo Electric(HK) Ltd. - SanyoEnergy (HK) Co.

NROC Solar Panels Still at the DSWD-NROC storage


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Table 15.Physical Outputs/Accomplishments

Particulars Amount/Units

Relief Operations for the procurement, Repacking of FFPs (with 3 kg/6kgrice) distributed to 1,472,251 affected families and 918,261 displaced due toTyphoon Yolanda as of Feb. 3, 2014

Region IV-B 21,925 FFPs Region V 60,368 Region VI 821,855 Region VII 147,477 Region VIII 5,327,267 CARAGA 5,285

6,384,177 FFPs

Transitional shelters established Region VI Region VII

14 Units140 Units

Cash-for-Work Region VIII (NDRRF) as of Feb 3, 2014 P 22,407,011Rehabilitation and Recovery: a psychological sound safe, and securecitizenry that is protected from the effects of disasters to restore to normalfunctioning after each disaster at the calamity areas/FOs

No. of counselling and psychosocial interventions

Work and Financial Plan for the Cash Donation Core Shelter Assistance Provision of Motorized Bancas Provision of Family Kitchen Kits Cash For Work Livelihood Assistance Purchase of Forklift Supplementary Feeding Provision of Pedicabs Repair of Regional Rehab Center for the Youth Payment for Satellite Internet Services Provision of toys thru Wish Upon a Star Provision of toys and art materials for play and art therapy for

child-victims

P 677,040,00020,700,00034,847,12014,527,99712,231,320

3,880,0008,000,4002,906,2952,000,0001,493,0791,147,680

528,852


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OBSERVATIONS

FundingIssues/Constra ints

1. Due to the urgency of need, the DSWD resorted to theutilization of other available funds amounting to

P116,352,088.04 and P373,187,252.42 to purchase supplies forthe Yolanda Relief Operations in NCR and Region VI,respectively.

Management commented that in the performance of its mandatedduty to provide augmentation to the affected population through theLGUs, it had to act immediately to respond to the urgentrequirements of the calamity victims. Their experience from pastdisasters indicated long delays in the actual release of CalamityFunds or QRFs even if the Department immediately requested for

budget releases. Thus, it had to source from available allotments(budget) to enable it to respond and carry out its mandated taskswith dispatch. The amounts utilized were replaced upon receipt ofthe SARO for typhoon Yolanda.

Low Uti l izat ionof CashDonat ion

2. Cash donations as of December 31, 2013 amounting toP736,297,751.52, which were received for Yolanda victims, inaddition to prior years donations of P45,714,339.19 or a totalamount of P782,012,090.71 remained unutilized and depositedin DSWD bank accounts.

Management commented that to ensure proper utilization of cashgranted for various calamities, particularly for the typhoonYolanda victims, proper planning as to target location, beneficiaries and their needs had been conducted for efficientimplementation that would meet specific targets and achievefavorable outcomes. To date, total disbursements from theapproved Work and Financial Plan of P779,486,400.15 havealready reached P14,771,997.00 while the remaining balance ofP764,714,403.15 for other relevant components, part of which is to provide core shelter, is being processed for release to areasaffected by typhoon Yolanda. These funds are intended for theearly recovery programs of the victims of Yolanda, such as CoreShelters, Basic Infrastructures, and Cash-for-Work andSupplemental Feeding. To date, 80% has been allotted to coreshelters but the Department is still waiting for the declaration of itsLGU partners if the proposed locations for the shelters are safe ornot.


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Management also proposed policy reforms on the use of donatedfunds, particularly for core shelter assistance, which would allowthe DSWD to acquire resettlement lots to ensure the efficientimplementation of the program.

Delay and lackof coord ina tionin thed i s t r ibu t ion o fdona ted goo ds

Table 16

3. Shipment of 14 container vans of donated goods was received byFO VI as of 30 January 2014 or approximately 28 days fromrelease at the J&Y Sons Cupang Warehouse through DSWD-OSEC and distributed to various LGUs as of 7 March 2014.

Based on the report of releases from the J&Y Cupang Warehouse prepared by the requesting office (Disaster Risk Reduction andResponse Operation Office or DRRROO), DSWD OSEC, as of January02, 2014, there were 14 container vans shipped from Manila to IloiloPort for the DSWD FO VI as consignee. As of January 21, 2014, results

of validation by the audit team showed the following:

DateValidated Particulars

No. of ContainerVans

1/3/14 Container Van unloaded at Iloilo Sports Complex OperationsCenter 2 (unloaded on 1/7/14)

1

1/21/14 Actual number of container vans at the PPA International Port atLoboc, Lapuz, Iloilo City

1 container van is being unloaded for the Province of Antique; 1 container van already issued to Aklan but the contents have been partially unloaded.

7

1/21/14 Container vans not yet accounted because they were not at thePPA port during the validation but are included in the Report onReleases from J&Y Sons Cupang Warehouse prepared by theDRRROO of DSWD-OSEC:

Out of the six (6) container vans four (4) had already beenissued to the Provinces: (Iloilo-3 and Aklan-1) Two (2) container vans were not in the PPA Port, hence, presumed not yet delivered.

6

Total container vans per DSWD-OSEC Report 14

Management commented that goods were already distributed to variousLGUs. As per Inventory Report dated January 30, 2014, only 14container vans were received. Two container vans arrived in January2014 and February 7, 2014, respectively. As of March 7, 2014, all 17container vans were accounted for and their loads were distributed tovarious LGUs.


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Hence, the DSWD management decided to process th ecancellation of the undelivered bottled water . The cancellation ofthe order for 5,588,800 bottled water or a total of P39,121,600.00(56.45%) of the total cost of the approved POs is already beingdiscussed with the suppliers .

Report ing issuesin Produc t ion o fFFPs

5. In NCR, the production of FFPs per hub, as reported in the statusof repacking and issuances of FFPs on various dates as ofNovember 30, 2013, was overstated by 91,947 FFPs, valued atP33,299,525.00, as compared to the total production and releasesof FFPs per TOS. Thus, the reported production of FFPssubmitted to the DOF and the OP on December 2, 2013 is morethan the actual FFPs produced.

Management clarified that during this period, there were several

repacking centers being established with different personnel manningthe centers on a 24-hour rotation basis of two to three shifts per day.Hence, the DRRROO cannot ascertain the accuracy of the reported production data. Management requested for ample time to review anddouble check any available data on the repacking centers until April30, 2014 and the report together with the attachments submitted toCOA and ensure the use of existing DSWD recording, monitoring andreporting system.

6. Procured supplies intended for relief operations have not been

fully delivered by the suppliers due to logistical gaps, such as lackof storage facility while awaiting repacking and eventualtransport to affected areas and lack of delivery trucks.

Management commented that the Procurement Service diligentlycoordinated with the suppliers and their operations groups , theDRRROO, the FOs and all other units to resolve the situation. Onthe undelivered supplies (rice and water) by suppliers, they willconsider a policy of On -demand delivery/withdrawal from suppliersscheme or request for blanket authority for the DSWD to go into

Ordering Agreement or On Demand procurement for disasteroperations requirements to address the storage issues.

Delayed/Non-Del ivery ofSuppl ies

They commented further that while suppliers managed to deliver thestocks of bottled water, delivering the same to the DSWD warehousesat NCR or affected areas immediately was not possible due to: 1)lack of storage space at NROC; 2) lack of delivery vehicles/trucks to


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Management ofinventor ies /supp l ies andwarehous ingissues

transport these to all affected areas; and 3) congestion at the port ofMatnog, Sorsogon or even in some areas in Regions VI and VII ascargo vessels could not move out of the ports due to long queues ofcargo trucks, passenger buses and private vehicles rushing to go tothe affected areas.

Also, the adjustment in the delivery schedule was made by the DSWDor with their concurrence to avoid further incurrence of demurragecharges of delivery trucks that cannot be unloaded immediately due tolack of space.

7. The supplies amounting to P58,029,631.29, which were acceptedand delivered to NROC from December 26 to 31, 2013, were notproperly stored but were piled at the grounds of NROC for morethan a month, exposed to rain and direct sunlight. Exposure to

these elements may lead to spoilage/wastage and leave the goodsnot fit for human consumption.

Management explained that the overflowing stocks at N R O C can beattributed to the logistical nightmare that the DS WD encounteredin the course of Special Operations Y olan d a . The transportation ofthe goods could not cope with the bu lk or voluminous deliveries atthat time. Also, there were many players involved and key aspectsof disaster relief op eratio n s were beyond the control of DSWD.In compliance to the audit recommendations, suppliers of canned

goods and 3-in-1 coffee were asked to deliver to various identified ports.

8. Actual physical count of unpacked supplies on November 24, 2013in NCR, prior to the deployment of monitoring teams, showed135,540 items unaccounted to include shortage of almost 1,000sacks of rice.

Management concurred with the findings on the unaccounted 1,000sacks of rice, based on the actual physical inventory of the unpacked

rice, but requested further validation on these findings until April 30,2014.


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Documentat ionand recordingi ssues

According to Management, based on the monitoring conducted, theDRRROO found out that the measuring device used for the repackingof rice were of different sizes and types, such as pots and mayonnaise jar, hence the possibility of disparity on the volume of rice packed inthe plastic bags.

9. Inefficient warehouse management and inadequate facilities tostore relief/donated items resulted in the difficulty of conductinginventory and delayed shipments to intended beneficiaries.

Management commented that they plan to request the DBM to allowthem to utilize Calamity Funds for purposes of constructing or rentingwarehouses for use during large-scale disaster operations. Currently,DSWD is working out an agreement with the UN-World FoodProgramme and the OCD for construction of island cluster warehouses

which will serve as storage warehouses and training centers forLogistics and Warehouse Management in Clark Air Base (for Luzon),Cebu (for the Visayas) and Davao (for Mindanao regions) to beef upthe capacity of DSWD as Vice-Chair of NDRRMC s DisasterResponse.

10. In Region VI, deliveries of 43,541 sacks of rice amounting toP58,780,350.00 purchased from the NFA and covered withWarehouse Stock Issued (WSI) were not tracked to the issued POs,which made verification and reconciliation processes difficult.

Management commented that to date, it had already forwarded theWSI indicated in the PO and that they will submit a report on thissoon.

11. Lapses were noted in the documentation and recording of reliefgoods as follows:

a. in- and out-bound of supplies from warehouses without dulyapproved documents;

b. inaccurate inventory of supplies;c. discrepancy between accounting and reporting of FFPs by the

personnel stationed at each warehouse vis-a-vis the reported FFPs by DSWD personnel;


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Service was a ble to endorse to COA the related documents for thego od s procured in the total amount of P972,485,551.04. T h edocuments were sent in four (4) batches, received by th e COAResident Auditor on the following d ates :

21 Feb 2014 (Batch 1): P112,689,813.04 21 Feb 2014(Batch 2): P76,638,792.00

06 Mar 2014 (Batch 3): P147,048,256.00 03 Apr 2014 (Batch 4): P636,108,690.00

The submission of the documentary requirements was delayed becausethey had to be collected from the different areas or receiving points,arranged, and organized in such a way that each delivery receipt,acceptance or acknowledgment receipt and the like are placed underthe correct PO with the corresponding RIS/PR to avoid confusion ormisinterpretation of the documentation.

On the other hand, DSWD FO VII commented that although the POswere issued at the time of disaster without the necessary supportingdocuments, they conscientiously complied with the POs and attachedthem to the vouchers at the time of payment. Considering that the onlydocument are only BAC Resolution for the Emergency Purchase, thequotation from the suppliers, Inspection Report, Delivery Receipts andcharge invoice/billing statements, they ensured that these documentswere at hand before the activities were done.

13. Damaged goods and dented canned goods in FO VII were excludedfrom repacking and just set aside without a report made toaccount for the same. Disposal was likewise not documented.

14. The system adopted by DSWD FO VI in its relief distributionoperations did not provide daily and periodic reporting on theresults/status of its operations as well as accounting of fundsreceived and its utilization given the huge funding, defeating the purpose of pinpointing responsibility and promotingaccountability and transparency.

DSWD-FO VI Management commented that after the Yolandaexperience and upon the advice of the audit team, systems and procedures were continuously enhanced to address the currentvolume of goods received and released to victims. However, there isa need to train all staff so that in massive calamities, there would bea wider base of trained personnel who can be relied on.


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Loading/ shipm entand log i s t i c sissues

15. In Regions VII and VIII, the contents of the FFPs were exposed torisk of damage due to improper handling of the shipped goods,which resulted in the spoilage of 7,527 FFPs with an approximatecost of P2,784,900.00; and 19,172 canned goods, 81 packs ofnoodles and 21 sacks of rice, in addition to the 76,300 assorted

canned goods that were transported via Isabel, Leyte, were nolonger fit for human consumption.

The following lapses were noted in Regions VII and VIII whichresulted in damage to FFPs and relief goods:

a. inadequate supervision and monitoring in the unloading ofgoods from barge due to manpower constraint;

b. unavailability of empty container vans, trucks, cargo shipsand other logistics to transport the relief goods from port to

storage building; c. absence of concrete guidelines and preparedness in

handling huge volume of relief/donated goods; and d. use of dump trucks in transporting/loading/unloading of

relief goods, specifically in Region VII

Management explained that the issue of the damaged goods deliveredthrough Light Cargo Transport (LCT) Carmen was due to the bargemanagement/crew who failed to take good care of the loaded goods.There were no pallets or adequate and proper tarps or covers to protect

the goods from seawater or rain while in transit from Cebu City toTacloban City. In addition, the boat was not allowed to dockimmediately at the Tacloban wharf when it arrived and there was no proper coordination or information relayed to DSWD-FO VIII.

DSWD Management requested that they be authorized to use theirQRF -MOOE for the acquisition of equipment in order to address thelogistics issue, as well as the establishment of satellite warehouse andlogistics hubs in island clusters (Luzon, Visayas and Mindanao).

Distr ibut ionIssue

16. In Region VI, out of the 112 LGUs served with FFPs, only 29 hadaccomplished the Relief Distribution Sheet (RDS) hence, it cannotbe ascertained if the FFPs released were actually received by theaffected families.

DSWD Management requested COA to relax the documentationrequirements for FFPs, specifically those distributed through helicopter


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Other issues

drops. On the other hand, FO VI Management commented that as ofApril 15, 2014, a total of 36 LGUs have submitted the required RDSand they have continuously sent reminders to LGUs to submit RDS.While the RDS has not been completely collected, the silence of thevictims is a good indication that they have received goods from the

DSWD.

17. Volunteers assigned relief operation center in NCR were not givenIDs or name tags for easy identification and to distinguishvolunteers from management personnel, or from those involved inthe relief operations, putting risk to security and internal controlon supplies and promoting the opportunity to commit fraud.

Management commented that the volunteers will be issued IDs toidentify them as volunteers that would deny their access to security-

controlled areas at NROC. They will be required to wear their IDswhile inside NROC premises. The DSWD personnel, on the otherhand, will be required to wear their office IDs and vests for properidentification.


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RECOMMENDATIONSFundingIssues/Constra ints

Low Uti l izat ionof CashDonat ion

Delay and lackof coord ina tionin thed i s t r ibu t ion o fdona ted goo ds

1. Ensure that the processing time in the DSWD and DBMfor the request and release, respectively

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Report on the Audit of Typhoon Yolanda Relief Operations

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