When 'double entry' means double whammy -- Leonor Magtolis Briones
LEONOR MAGTOLIS BRIONES/abs-cbnNEWS.com | 09/15/2008 12:52 AM
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When I was a 13-year-old college freshman, the first thing I learned in Accounting 11 was the “double-entry system of accounting.” I was taught that this is an improvement over the “single-entry system” which is no more than a mere listing of income, expenditures, and other accounts.
The basic principle which was drummed into our heads was that in all transactions, “for every debit, there is a corresponding credit.” The system ensures that all accounts will be balanced and total debits have to equal total credits. If the accounts do not balance, it can only mean that there is an error somewhere. Thus, an accounting system based on the double entry method is considered a good thing.
The “double entry” debate in the Senate
Lest the informed reader be misled, the current debate over the “double entry” controversy on a project for the extension of the C-5 road appears to be a different kettle of fish altogether. Sen. Panfilo Lacson has stated that this extension project is entered twice in the 2008 Appropriations Act, resulting in a doubling of the original, estimated cost of P200 million. It appears to be a case of double counting.
I was away in Europe for a week and missed the fireworks as well as the details of the transaction(s). As expected, media accounts could not immediately uncover the minutiae of an issue which might be complex and many-sided. Pending the generation of more data, the following questions might help in shedding light on issues of public interest.
1. Is the C-5 extension project an original project of DPWH? If this is so, it is likely to be in the proposed National Expenditure Program (NEP) for 2008. This is very easy for media and the Senate to trace because the NEP is a public document. If it is in the 2008 NEP, is it only for P200 million or is there another “part” as claimed, in the same amount?
2. If it is not in the 2008 NEP was the project added by the House of Representatives or the Senate? During the appropriations phase of the budget, both houses of Congress can propose additional allocations. However, they should also identify the sources of funding since the total amount of the budget set by the Executive cannot be changed. If it was introduced by either house, then the project will appear in the House version or the Senate version of the national budget.
3. If the project is either in the House or Senate version, is it for “one part” or” two parts?”
4. If the project is not in the three sets of documents ,whether in whole or in part,
the possibility is it could have been inserted during the Bicameral Committee negotiations.
Enter the Third House, e.g. the Bicameral Committee
The public knows that the debates on the national budget are conducted in the House of Representatives under the relentless glare of television cameras, the whirr of tape recorders and the scratching pencils of reporters. Interested parties and individual citizens can watch public hearings unless the Chairman of a Committee decides to call for an executive session.
The public can also watch debates on the final deliberations in both the House and the Senate. However, when the two versions of the national budget are reconciled through the Bicameral Committee, the public is shut out.
The power of the Bicameral Committee cannot be underestimated. It determines the final form and content of the national budget. This is why it is traditionally called The Third House.Yet, its deliberations are not public. There are no records of the deliberations either.
The Executive cannot say with a straight face that it does not know anything about the insertions. The administration members of the Bicameral Committee are in constant touch with the Executive during deliberations of the committee.
Inspite of all the claims of transparency and openness to the public, the last and most important phase of the budget process before submission to the executive is finalized behind closed doors, outside the realm of public scrutiny.
Some niggling questions
1. The DPWH through Undersecretary Bonoan claims that the project has two “parts “ at P200 million each. The DBM has “confessed” that there is only one project .. No harm has been done because the money for the second part will not be released. Will it not just go to the “overall savings” of DBM and be spent for other projects?
2. What happens when a P200 million “honest” mistake is made? I thought it is said
ignorance of the (budget) law excuses no one.
3. Who is benefiting from all these squabbling? Obviously the Executive. Who
overlooked the double counting? The Executive.
4. The DBM says the P200 million has already been released. Who were the recipients? How much was the cost of the land for the right of way?
When “double entry” means double whammy
Experts say that it will not be too difficult to pinpoint responsibility for this mess. What is needed is political will. The documents can easily be traced.
This unpleasant episode brings to light a major part of the budget process which remains dark and murky. The negotiations and compromises among the three institutions (Executive, House and the Senate) must be brought out into the harsh glare of truth.