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CoA cites DoST failure to collect P251-million worth of refunds from MSME lending program

coa cites dost failure to collect p251 million worth of refunds from msme lending program 816x445 - CoA cites DoST failure to collect P251-million worth of refunds from MSME lending program
COA 062519 - CoA cites DoST failure to collect P251-million worth of refunds from MSME lending program
PHILSTAR

THE Commission on Audit (CoA) said the Department of Science and Technology (DoST) failed to collect P251 million worth of refunds from the beneficiaries of its financial assistance program for micro, small, and medium enterprises (MSMEs).

The DoST Small Enterprise Technology Upgrading Program (SETUP) is the agency’s flagship program for providing financial assistance to qualified enterprises with the commitment to refund the cost of the innovation support system.

“Other receivable balances pertaining to SETUP projects include P461.150 million past due accounts for over one to 10 years, of which P251.040 million reported with uncollected refunds due to the inadequate/ineffective monitoring and evaluation on the viability of projects,” CoA said in its annual audit report.

CoA noted that termination of contract agreements by the various beneficiaries led to the agency’s failure to collect.

“Termination of contract agreements by various beneficiaries was due to the following: weak market demand, health problems of the owners, internal conflicts with the organization, low sales and others which ultimately led to non-payment of their obligation to the government,” said the auditing agency.

It added that the “lax enforcement” of the provisions of the memorandum of agreement between DoST and the beneficiaries also contributed to the defaulted refund payments of several beneficiaries and premature termination of the projects.

In the report, DoST commented that “the intention of the program is to help the MSME contribute to countryside economic development and the lapses of the program are beyond the control of the DoST PSTC (provincial science and technology center).”

CoA recommended that DoST conduct a Technology Needs Assistance (TNA) and evaluation of the feasibility of the proposals.

“Include in the selection criteria of prospective proponents the stability of proponent’s business and its target markets to ensure returns on government investments and the attainment of the objective of bringing science and technology for countryside development,” CoA said.

CoA also recommended that DoST to intensify the monitoring of projects after release of funds. — Vince Angelo C. Ferreras

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