Beneco Board disqualified from sitting in hold-over capacity with P54.6-M unsettled fund: NEA
BAGUIO CITY – (September 13, 2021) – The National Electrification Administration said in its audit report that “An EC (Electric Cooperative) director or officer, in order to remain as such, must continue to possess all the qualifications and none of the disqualifications throughout his term/tenure of office.
To this end, no EC Director shall be allowed to stay in Office in a hold-over capacity if he/ she fails to meet all the qualifications”, the NEA said in its recent audit report.
The continuing qualification requirement is provided for in Republic Act 10531 or “An act strengthening the National Electrification Administration, further amending for the Purpose Presidential Decree 269, as amended, otherwise known as the National Electrification Administration decree.”
Based on the audit report, Beneco has an account receivable of P54,633,718.15 from the Board of Directors (BOD) with P37,365,417.24 outstanding balances of personal and official cash advances of the incumbent Board of Directors.
The other amount emanated from the NEA disapproved periderms from board meetings done more than the normal or were done weekly. There were also benefits like 13th-month pay, anniversary bonuses, year-end bonuses, and Christmas bonus, and other benefits paid to the BOD applying the benefits of the employees provided for under the Collective Bargaining Agreement although the BOD they are not covered or entitled to receive them.
They also went to have excessive signing privileges in Beneco accredited restaurants in Baguio, La Trinidad, and Buguias which must be used with guidelines and limits as stipulated in Beneco Board resolution but “exceeded what as allotted to them for the year.”
The NEA Disallowed P4,449, 329.02 incurred in signing privileges.
A BOD is allowed by a 2018 Board resolution of P100,000 a year and P200,000 a year for the BOD President but the NEA found excessive amounts.
The NEA also took note of the excessive gasoline allowance used by the BOD compared to what was allowed to them during board meetings.
The NEA said in its audit report “the Board should immediately refund all NEA audit disallowances and is reminded to refrain from claiming benefits and allowances over and above NEA guidelines to avoid future disallowances.”
It also said, “the coop should refrain from granting personal cash advances to the Board of Directors, otherwise this will be charged to the personal account of the signatories of the check voucher.”
In the report, the NEA also took note of the release of cash advances to the members of the BOD despite not having liquidated an earlier issued cash advance.
The NEA also mentioned the P1 million loan of Director Esteban Somngi using Beneco’s credit line with the Development Bank of the Philippines.
The NEA further went on to say “the management should immediately liquidate their outstanding cash advances and ensure full settlement of their obligations with the coop.
The NEA also took note of the number of years the BOD has been sitting in the office.
“As can be observed, most of the BOD should have been in 2018 but was deferred for two months as approved by the NEA in April 2018. It was further extended to the 3rd quarter of 2019 due to the conduct of the barangay elections and was ordered to do the election in the same period. However, the Beneco board in a December 2019 resolution move the same to the first quarter of 2022.
The said boar resolution was approved by NEA on the condition that the board sitting on hold-over capacity must continue to possess the qualification and none of the disqualification which include having no unsettled or outstanding obligation.
Section 16 of the Department of Energy Circular dated September 2014 on the continuing qualification requirement of a Director and Officer provides that “members of the EC Board shall be deemed to have unsettled obligation including power bills, cash advances, disallowances (including NEA findings) and materials and equipment issuances. Provided further that at any given time during his membership in the EC, he or she must be totally free of any unsettled or outstanding obligations and or disallowances with the EC.”
In the NEA audit, it said “Beneco Board of Directors are deemed disqualified and should not be allowed to remain as such as they failed to meet the continuing qualifications required on the following grounds:
All of them are unsettled NEA audit disallowances. Some are liquidated cash advances, personal loans, and car loans. Not in good standing for having unpaid power bills for months.”
The NEA audit covers the years 2019 and 2020.
The Beneco went on to register with the CDA as approved in a referendum.
The registration also provided for an extension of the term of the BOD.
Atty. Marie Rafael, newly appointed General Manager of Beneco said she had initial talks with newly installed Cooperative Development Authority (CDA) Regional Director (RD) Marietta Hwang on the extension of the provisional registration and partnership with other Cooperative in Baguio and Benguet to have a Beneco that is truly a Cooperative sa Puso at sa Diwa.
She added that under her leadership, a CDA registered Beneco will be more financially transparent with its member-consumers owners. ###