COA’s CSR towards a More Sustainable Operations

Corporate Social Responsibility

Corporate Social Responsibility is an advocacy worldwide supported by socially responsible frameworks and principles to promote organizations’ commitment to human development and environmental rehabilitation and restoration. Corporate Social Responsibility (CSR) is defined by World Bank (House Bill No. 305, 2013) as “the commitment of business to behave ethically and to contribute to sustainable economic development by working with all relevant stakeholders to improve their lives in ways that are good for business, the sustainable development agenda, and society at large.” It is also illustrated in the Carroll’s CSR Pyramid that social responsibility has different levels and that contribution of resources for life improvement is the highest.

Figure 1: Carroll’s CSR Pyramid

Another model that shows company’s responsibility to human development is Dr. Teehankee’s “Boat of Life” that depicts an illustration of a boat where most of the society’s members are experiencing exploitation and drowning and companies must do something to uplift these people to obtain integral human development.

CSR engagement is not only popular in private companies but also is encouraged to be applied by public entities because the government is task to regulate and coordinate with such CSR activities. Section 2 of the House Bill 305 dated July 01, 2013 – An Act Encouraging Corporate Social Responsibility, Providing Incentives therefor, and for other purposes states that:

Sec.2. Declaration of Policy. – The State recognizes the vital role of the private sector in nation building and shall encourage its active participation in fostering sustainable economic development and environment protection in the Philippines. Towards this end, the government shall mobilize its various agencies, in coordination with non-government, and people’s organizations, to work hand in hand for the integration, promotion, and strengthening of corporate social responsibility in all business organizations.

Constitutional Mandates of the Commission on Audit (COA)

The Commission on Audit (COA), designated as the Supreme Audit Institution of the Philippines is created under the provisions of Article 1X-D of the 1987 Constitution.

Section 2(1).The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity. However, where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the Government and, for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto.

Under Article IX-D of the 1987 Philippine Constitution, the Commission on Audit is mandated to perform the following:

1.Examine, audit and settle all accounts pertaining to the revenueand receipts of, and expenditures or uses of funds and property owned or held in trust by, or pertaining to, the government.[Section 2(1)],

2.Promulgate accounting and auditing rules and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of government funds and properties.[Section 2(2)],

3. Submit annual reports to the President and the Congress on the financial condition and operation of the government. (Section 4),

4.Recommend measures to improve the efficiency and effectiveness of government operations. (Section 4),

5. Keep the general accounts of government and preserve the vouchers and supporting papers pertaining thereto. [Section 2(1)]

Section 9 of THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES states that “The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.” This statement is lifted from the 1987 Constitution which also created COA and is also consistent with CSR’s definition. Therefore it is worthwhile for COA to participate in CSR activities.

Current State of COA’s CSR

COA in its social responsibility continuum, is involved in various CSR activities in the country and in international endeavors, from providing calamity help, supporting values formations and livelihood programs to environmental audit. Among the activities of COA that promotes social responsibility and human development are its programs and projects in Gender and Development (GAD) and its implementation of Citizen Participatory Audit (CPA). These activities are headed by our current Chairman, Maria Gracia Pulido-Tan and COA officials.

Gender and Development (GAD)

Sec. 27. Programs/Projects Related to Gender and Development (GAD). In consultation with the National Commission on the Role of Filipino Women (NCRFW), all departments including their attached agencies, offices, bureaus, agencies, state universities and colleges, government-owned and controlled corporations and other instrumentalities, shall formulate a GAD Plan, designed to empower women and address gender issues, in accordance with R.A. 7192 and the Philippine Plan for Gender-Responsive Development (PPGD), 1995-2025. The cost of implementation of the GAD Plan shall be at least five percent (5%) of the agency’s total FY 2000 budget appropriations.

All concerned government entities shall submit their GAD plan to the NCRFW for review. They shall likewise submit annual reports to the Congress, the Department of Budget and Management (DBM) and NCRFW, indicating the accomplishments and amounts utilized to implement programs/projects/activities addressing gender issues and women empowerment. The evaluation of agencies’ utilization of the GAD budget shall be performance-based.

In addition to Joint Circular 99-4 issued by the National Economic and Development Authority (NEDA), the DBM and NCRFW, additional sets of guidelines, as deemed necessary, shall be formulated, for the implementation of GAD-related programs/projects/activities.

COA GAD Plan and Budget

The COA GAD Plan and Budget is a two-year plan which aims to put into place effective mechanisms and measures for gender mainstreaming throughout COA. It spells out the issues and concerns on gender, establishes strategies and instruments with reachable targets for the Focal Point. It also reports the corresponding budget to be carried out in implementing GAD PAPs.

The plan builds on lessons learned in the implementation of the previous plans and the observations of the GAD advocates and by the NCRFW.

Accomplishment Report

The accomplishment report presents the programs/projects achieved by the gender Focal Point in a certain financial year and the corresponding cost in implementing the same.

For the year 2005, highlights of the Focal Point’s accomplishments are as follows:

On Policy Development:

• Submitted the proposed "Implementing Guidelines on Anti-Sexual Harassment Act of 1995 (Republic Act 7877) to the Commission Proper; and
• Conducted research and analysis of the survey results on "gender audit"

On General Administration and Support to Human Capital Development

• Conduct of GAD seminars
• Full management of the Day Care Center
• Conduct of lectures on common diseases and prevention thereof
• Spot check and ocular inspection of the COA canteen to improve canteen services and hygiene of canteen workers

COA Citizen Participatory Audit

The Citizen Participatory Audit (CPA) is an idea initiated by COA Chairman, Maria GraciaPulido- Tan in including the Filipino citizen in the COA audit process. The CPA started its operation through the Citizen’s Desk located under the office of the COA Chairman. Citizens are encourage to report, comment and suggest their ideas and knowledge about government projects in texting and contacting the hotline manned by a COA staff in the Citizen’s Desk. The audit team will include two to three ordinary citizens from the locality of the project site and they will be trained to perform low-technical aspects of the audit (par. 18). Tan added that with CPA, citizens will have an increased awareness and knowledge of the government, their ownership of public funds that came from their taxes will be strengthened, they will be part of government decisions, and public service delivery will be improved.

According to Chairman Tan (2014), recent implementation of CPA could be seen based on the pilot audits on the CAMANAVA Flood Control Project, the Conditional Cash Transfer (CCT) and Barangay Health Centers, and the Solid Waste Management Project of Quezon City.  CPA is also engaged with the Concerned Citizens of Abra for Good Governance (CCAGG), “a non-governmental organization that monitors government projects in the Abra region of the northern Philippines” (COA, 2005).

Identification of a potential CSR activity and its adaptability

COA has no separate sector for CSR (as illustrated by its organizational chart) and most of its CSR activities are only based on invitations of other organizations and suggestions of its officials. Thus, for COA to increase its commitment in promotion of public accountability, transparency and good governance, and with its recommendatory powers mandated under the constitution, the inclusion of CSR in its audit functions and to audit the CSR activities of the government in collaboration with these government agencies as well as international organizations such as United Nations is a good idea because at the present, GAD has already been included as one of the audit areas in government agencies.

One of the areas on which COA could focus its CSR activities is on the field of education and employment. It can provide college scholarship programs in accounting, engineering and information technology courses for deserving students who will have the opportunity to be eventually employed in COA after successfully finishing the program. In this view, COA could respond to Commission on Higher Education (CHED) concern that more high school students could not afford to continue their studies in college because of increasing tuition fees (Montenegro, 2011) and to increase the employment rate of 59.4% (employment to population ratio, ) in the Philippines.

Professional and Institutionalized Development Sector (PIDS) is a sector of COA that is in charge of establishing and implementing the relevant training for COA employees as well as for non-COA government employees. Its training programs and seminars also extended in other government agencies, professional organizations and international bodies. This will be the sector which will help in the fulfillment of the scholarship program in coordination with the Human Resources Sector for the employment concern.

On the other hand, COA also has an opportunity extending its audit by the environmental audit adoption since it is involve in auditing the Department of Agriculture and the Department of Environment and Natural Resources. Recently COA joined the International Organization of Supreme Audit Institution (INTOSAI) in the zero waste management of Marikina (COA, 2013).

As observed, COA has no extensive CSR activity aside from GAD and CPA. It has no planned regular CSR engagements except when invited by other government agencies and international organizations. With the proposal of including CSR in its audit services in addition with GAD and CPA, COA CSR efforts will be integrated in its audit functions and mandate.

COA, having the recommendatory powers and fiscal autonomy can initiate this CSR integration within its strategic plan.