An expensive–and unaccountable–legislature

Our latest series summarizes some of the key findings of a two-year-study conducted by the PCIJ on Philippine legislatures which are published in an upcoming book called, The Rulemakers: How the Wealthy and Well-Born Dominate Congress.

Part Two of the series describes how expensive Congress has become. In 2002, taxpayers spent nearly P1 million every month on each senator and close to P500,000 on each congressman. Moreover, even as most government agencies tightened their belts, Congress continues to legislate increases for itself. On the average, the upkeep of legislators has risen 10 percent every year since 1994. In 1999, this leaped to as high as a 60-percent increase in the House and a 72-percent increase in the Senate compared to the previous year’s.

The Philippine Congress

The Philippine Congress

IN 2002, taxpayers spent P939,472.47 every month on each senator and P429,601.79 on each congressman, based on published reports.

Shocking as these amounts may sound, they reflect only part of what Filipinos pay for their legislators’ upkeep. Government auditors themselves say they are in the dark over how Congress spends most of its money, in part because there is hardly any paper trail to help them scrutinize how lawmakers use public funds.

What they do know is this: On the average, the upkeep of legislators has risen 10 percent every year since 1994. In 1999, this leaped to as high as a 60-percent increase in the House and a 72-percent increase in the Senate compared to the previous year’s.

The hefty rise was due to the fact that lawmakers gave themselves a raise. Their basic salaries were upped that year. In addition, there were significant increases in the budget for foreign travel in both chambers as well as in local travel among congressmen.

Even as allocations for basic services such as education and public health have increased by only small increments in the last decade, Congress has used the power of the purse to put much more money into its own coffers.

The Rising Congress Budget
Rate of Increase in the General Appropriations Act and the Budgets of the House of Representatives and the Senate, 1994-2003

1994 332,694,974,004 1,171,924,000 472,000,000
1995 387,397,933,000 16% 1,264,282,000 8% 516,670,000 9%
1996 394,855,182,000 2% 1,477,000,000 17% 562,926,000 9%
1997 433,817,543,000 10% 1,530,424,000 4% 703,084,000 25%
1998 546,743,816,000 26% 1,841,184,000 20% 918,648,000 31%
1999 585,097,506,000 7% 1,827,486,000 -1% 900,302,000 -2%
2000 665,094,141,000 14% 2,380,624,000 30% 1,008,295,000 12%
2001 665,094,141,000 0% 2,380,624,000 0% 1,008,295,000 0%
2002 575,123,728,000 -14% 2,625,952,000 10% 1,046,598,000 4%
2003 609,614,730,000 6% 2,833,574,000 8% 2,833,574,000 28%
AVERAGE 7% 11% 13%

Source: General Appropriations Acts, 1994-2003

Since the early 1990s, it has legislated generous increases for its own budget, which includes not only the basic pay of the lawmakers and their staff, but also their travel expenses, allowances, expenses of various congressional bodies, as well as the salaries of officers such as the Senate president and speaker of the House and the budgets of their respective offices.

From 1994 to 2003, the General Appropriations Act or GAA, which sets the national budget for a fiscal year, increased annually by an average of seven percent. In comparison, the House budget had an 11-percent average yearly increase; that of the Senate posted an average 13-percent rise.

In 2002, when the total national budget shrank by 14 percent, Congress raised its own budget -by 10 percent in the House and four percent in the Senate.

Yet the increasing sums for the legislature have not been matched by a rise in the number of laws passed. Since the 11th Congress, the legislative mill has churned slower and slower. Congress’s efficiency hit an all-time low in the years 2001 to 2004, when the legislature approved a measly 76 bills, compared to an average of 400 to 500 laws enacted in previous three-year congressional terms.

The slide began in the 11th Congress, although it is the 12th Congress that deserves the slacker’s prize. It boasts of a record low not only in the number of laws approved, but also in terms of the total number of bills filed. In addition, the percentage of bills filed to the number of bills passed is a mere one percent, compared to the three percent chalked up by earlier legislatures.

Before martial law, the Constitution fixed the annual compensation of senators and congressmen at P7,200 each, unless otherwise provided by law. The amount included per diems and other allowances, excluding only traveling expenses to and from their districts of congressmen, and to and from their places of residence of senators, when attending sessions of Congress.

There is no similar provision in the 1987 Constitution. Instead, the charter leaves it to the law (meaning the lawmakers themselves) to determine the salaries of members of Congress. It only prohibits any increase from taking effect until after the full term of all members of the Senate and the House approving such a raise has expired.

There is, however, a provision in the constitution that is supposed to guarantee the public access to information regarding the other sums legislators get from the government. That is why every last quarter of each year, the Commission on Audit (COA) publishes an “itemized list of amounts paid to expenses incurred” for each senator and for each congressman in a leading daily.

But the published COA lists apparently fall short of real Congress figures. The lists from 1994 to 2002, for example, represent only 47 percent of the total House budget published in the GAA and 26 percent of the Senate budget. Where the rest of the budgets went is unclear, because COA provides no such details.

Various reports and legislators themselves talk about amounts congressmen receive as officers or chairs of committees and “allowances” from the speaker, as well as cash advances and reimbursements for official activities. But these items are nowhere in the list of expenses of the House.

Increasingly Costly Lawmaking
Budgets of 1st to 12th Congress*

1st 1946-1949 428 15,106,160.00 35,294.77
2nd 1949-1953 543 24,825,219.68 45,718.64
3rd 1953-1957 1,078 30,122,930.00 27,943.35
4th 1957-1961 1,401 50,916,263.00 36,342.80
5th 1961-1965 1,192 150,318,700.00 126,106.29
6th 1965-1969 1,481 157,889,900.00 106,610.33
7th 1969-1972 512 210,625,556.00 411,378.04
8th 1987-1992 1,000 4,498,495,562.00 4,498,495.56
9th 1992-1995 534 4,634,149,000.00 8,678,181.65
10th 1995-1998 573 6,054,386,000.00 10,566,118.67
11th 1998-2001 415 8,876,539,000.00 21,389,250.60
12th 2001-February 6, 2004 76 11,231,882,000.00 147,787,921.05

* Budgets for each Congress are computed by adding the full legislative budgets for the first to the second to the last years of each congressional term. The budget of the last year of each term is excluded; instead this is computed as the first year’s budget of the next Congress.
Source: General Appropriations Acts (1946-2003) and Congress of the Philippines

In the Senate, amounts received by senators for similar duties are indistinguishable from other expenses such as advertising. According to a state auditor assigned to that chamber, these are lumped under the heading “Other MOE (maintenance and operating expenses).”

The auditor says though that the expenses of senators in the performance of their duties as officers and committee chairs are incorporated into COA’s published itemized list of amounts paid to and expenses incurred for each legislator.

But this does not seem to be the case. For instance, the amounts that appear in the Senate records for the senators’ settled MOOE (maintenance, operating, and other expenses), including foreign travel in 2002 were, on the average, 112 percent more than the figures published by COA. In short, the COA list reflected only about half the senators’ MOOE that year, when the government paid a total of P77.5 million for the overseas travel of 173 congressmen and 11 senators.

COA’s published list also showed that Senate President Franklin Drilon spent P6 million in MOOE that year. But the Senate’s ledger showed he accounted for P21 million or 250 percent more than what COA released to the public. The COA list also did not state the Senate president’s expenses for foreign travel in 2002, which added up to P1.3 million.

Moreover, Senate records pinpointed certain committees for which some senators drew additional MOOE. This means the discrepancy between the COA list and the Senate accounts was even bigger for these lawmakers.

Outgoing senator Ramon Revilla, for example, was given P21 million in additional MOOE in connection with his functions as chairman of the committee on labor, employment and human resources development. The late senator Renato Cayetano drew an extra P19 million as the Senate’s representative to the Joint Congressional Power Commission of the two chambers of Congress.

In 1997, the Presidential Commission Against Graft and Corruption (PCAGC) observed that many items in the Congress budget “are not liquidated and audited in the same manner as expenses of public funds by all other government officials where proofs, documents, receipts, contracts, vouchers, and other pertinent documents required by law, rules and regulation are submitted to justify these expense before COA would pass them in audit.”

“There is no mechanism,” continued the PCAGC, “by which they (members of Congress) are made to account for funds they received in the same manner as all other government officials are periodically made to account for the funds entrusted to them, either through the regular or special audit of COA or by Congress during budget hearings or in the committee investigations conducted ‘in aid of legislation.'”

As a general rule, the law demands that public officials submit receipts, contracts, and other documentary proof when they liquidate cash advances or ask to be reimbursed for expenses. There are exceptions, of course, among them the representation and transportation (local) allowances or RATA given to certain public officials – chief of division up – for official functions.

Given as direct payment to the official concerned or as a cash advance drawn by the cashier and supported by an approved payroll listing the officials entitled to RATA, these are considered “commutable,” therefore nontaxable and not subject to liquidation. All COA demands is a certification that the public official spent the money for the purpose.

Another exception, although not as all-encompassing, are “extraordinary and miscellaneous expenses” authorized under the GAA for activities ranging from meetings, official entertainment, or public relations, to membership in government associations, contribution to charitable institutions, or office equipment and supplies. Unlike RATA, these expenses are supposed to be paid on a reimbursement basis.

COA does allow public officials to submit either receipts and other documents as proof of disbursement or a certification by the public official before he or she is reimbursed. The rule, however, applies only to national government agencies. And extraordinary and miscellaneous expenses cannot be used for salaries, wages, allowances, and intelligence and confidential expenses.

Intelligence and confidential funds are paid through a cash advance to the agency head. To pass in audit, the project officer is simply required to submit a liquidation voucher directly to the COA chairman. The rules allow the voucher to be supported only by a photocopy of the paid disbursement voucher of the cash advance, a certification of the agency head, and approval of the president (plus the Special Allotment Release Order and Allotment and Obligation Slip in the case of a national government agency). No receipts, contracts, or other proof are demanded.

Because the bulk of the published MOOE of representatives is consolidated with the basic pay in the payroll, they are no longer required to liquidate the lump sum of more than P200,000 released to each of them at the start of every month. They simply acknowledge receipt of the money. They do not even sign a certification the money was used for the purposes for which it was meant for, says a senior COA auditor.

Apparently to go around the liquidation and taxation requirements, the House avoids classifying MOOE as “cash advances” or “allowances,” even if this is the way members of the chamber commonly see them. Instead, the House classifies them as “monthly allocations” or “outright expenses.” As a result, congressmen get away with not having to submit any document to account for these funds.

They are not expected to submit a payroll of their district staff or report their functions, salaries, and withholding taxes. No one starts asking if they do not produce a report on the research their offices should supposedly undertake. There is no demand for them to produce the list of consultants they have hired, as well as the contracts they draw up for those whose services they need. As far as the current rules go, how the legislators spend their public affairs fund is their business, and their business alone.

In the Senate, maintenance and operating expenses or MOOE are released through separate vouchers. But the only supporting document that is often demanded is a certification signed by the senator or his chief of staff that the amount was spent in the discharge of official function.

The sums are based on a voucher signed by the senator or his chief of staff, supported by an approved expenditure program for the month and a certification by the senator concerned that the budget for the previous month had been spent. “Extraordinary and miscellaneous expenses” are also lumped together in the MOOE and released as cash advances, not on a reimbursement basis.

COA personnel acknowledge that the standard rule in all other government offices is to liquidate cash advances that are sourced from MOOE, including petty cash, as well as travel and field operating activity expenses. Except for salaries, they say, the rest of the money paid to a representative should fall under this rule. But since these objects of expenditures are disbursed as “monthly allocations” or “outright expenses,” and not as cash advances, to a congressman, the government auditors say this frees the lawmaker from the obligation to liquidate the expenses.

An auditor who has been detailed at the House defends the setup: “The concept is, they (the congressmen) will spend the MOOE. How they operate their offices is up to them. They have the discretion because of the peculiar demands of their (district) office.”

COA, says the auditor, presumes good faith on the part of the congressman and regularity in the use of his monthly allocations. He adds that state auditors can only assume congressmen will abide by government rules on hiring, procurement, travel, meetings, and activities or projects.

But a supervising auditor of COA insists that the arrangement at the House is not sanctioned at all by law. No law or COA circular authorizes a representative’s expenses for supplies and other items for the maintenance of his or her office as “outright expenses” to be paid through payroll, he says. Other COA personnel, including auditors assigned to the House, admit as much. (The Senate, unlike the House, does not consider MOOE as “outright expenses.”)

“The system is defective,” laments the supervising auditor. “These are clear lapses in accounting and auditing procedures. How do we know if the congressman spent the money if he doesn’t account for it? What if he pocketed it?”

“If you really want transparency, congressmen must liquidate all the money that is released to them,” a veteran legislative officer remarks. “But they don’t. Well, even if they did, we know a lot would be fabricated.”

One auditor, though, is more forthright regarding why COA essentially leaves the House of Representatives alone. “The House is a political body,” he says. “We don’t want to get into trouble.”

Many of his colleagues agree. For instance, they point out, while COA is a constitutional body, the appointment of its chairman needs to be confirmed by the 25-member Commission on Appointments consisting of legislators from both the House and the Senate.

COA also finds itself at the mercy of Congress when budget time comes: The legislature wields the power of the purse. Horsetrading becomes inevitable, especially in the assignment of auditors. One senior congressman, for example, threatened to bypass the COA chairman’s appointment unless an auditor, who turned out to be a personal friend, was reinstated in a Metro Manila town. COA caved in.

Another auditor is even more blunt, saying, “We’re scared of congressmen, we’re scared of the system. Babalikan kami (They’ll seek revenge). We don’t want to tolerate corruption, but nothing happens to our reports. We just become subjects of harassment, and other people even make money out of our reports.”

Auditors who question irregular or corrupt practices in the agency — which is part of their work – are often quickly reassigned. — With additional reporting by Avigail Olarte and Booma Cruz

The findings of the PCIJ’s study of Congress are published in the book, The Rulemakers: How the Wealthy and Well-Born Dominate Congress.