Learning Note No. 3 CITIZEN PARTICIPATORY AUDIT IN THE PHILIPPINES— Pilot Phase I (2012–2014) Maria Gracia P. Tan Maria Gracia M. Pulido Tan is a lawyer and a certified public accountant, and was the first woman to head the Supreme Audit Institution of the Philippines. Ms. Tan served as Chairperson of the Philippines Commission on Audit (COA) from April 18, 2011, to February 2, 2015. Prior to joining COA, she served the Philippine government as Commissioner of the Presidential Commission on Good Government in 2002, taking charge of the management of sequestered assets and the financial affairs of the Commission. From 2003–2005, she served as Undersecretary of Finance (Revenue Operations Group) and supervised the Bureau of Internal Revenue, Bureau of Customs, and the One Stop Shop Duty Drawback Center. She also headed the Department’s Task Force on Revenue Measures and shepherded the enactment of several tax measures into law. Ms. Tan is currently a member of the UN Independent Audit Advisory Committee, where she served as Chairman for two years (2017–2018). She is also a member of the Board of Trustees of the International Budget Partnership (IBP). Ms. Tan is actively involved in work related to Integrity and Accountability, acting as resource person/consultant on governance and leadership initiatives as well as disseminating the CPA model in order to support the efforts of countries to make audits impactful on people’s lives. The author would like to thank the peer reviewers: Ms. Saeeda Sabah Rashid, Lead Financial Management Specialist and Maria Liennefer Rey Penaroyo, Financial Management Specialist, The World Bank; and Ms. Aranzazu Guillan Montero, Interregional Adviser on Public Accountability, Division for Public Administration and Development Management United Nations (UN) Department of Economic and Social Affairs (DPADM/ DESA), for their time and valuable contributions to the paper. The World Bank team is grateful to the Korean Development Institute (KDI) Trust Fund for the funding provided. For more information about this learning note please contact Ms. Carolina Luisa Vaira, Senior Governance Specialist, The World Bank. © 2019 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Contents / i Contents Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v 1. Mandate and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Constitutional and Legal Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Government Policy and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2. CPA Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3. The Structure and Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Essential CPA Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Subject of CPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Composition of Audit Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Nature and Scope of Citizen Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Selection of CSO Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Role of ANSA-EAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Building a Shared Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Selection, Roles, and Responsibilities of Citizen Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Joint Capacity Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Joint Audit Planning, Execution, and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Joint Post-Audit Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4. Professional Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Standards and Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Ownership and Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5. The Pilot Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Flood Control (KAMANAVA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Solid Waste Management (Quezon City) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Primary Health Care (Marikina City) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Disaster Aid and Relief (Haiyan) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 ii  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) 6. Issues and Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Addressing Resource and Capacity Gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Identifying Institutional Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Building Trust and a Shared Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Creating a Sustainable and Institutionalized Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 7. Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 An Enlightened and Accountable Citizenry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A Better-Informed Citizenry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 A More Involved and Vigilant Citizenry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 A More Accountable and Responsive Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 A More Efficient and Effective SAI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 8. The Way Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Institutionalization and Nationwide Rollout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Organizational Restructuring and Retooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Budget Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Expanded Citizen Participation and Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Building of Communities of Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Appendix A. Citizen Participatory Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Foreword   /  iii Foreword On November 26, 2012, the Commission on Audit (COA), together with the Affiliated Network for Social Accountability in East-Asia and the Pacific (ANSA-EAP), formally launched the Citizen Participatory Audit (CPA) in the Bangkulasi Pumping Station and Floodgate in Navotas City. This key reform initiative took on the challenge of transparency and accountability in the public audit process and was made possible with a grant from the Australian government under the Philippine-Australia Public Financial Management Program. The CPA Project was a major undertaking of the Philippines’ Supreme Audit Institution under the leadership of Chairperson Maria Gracia M. Pulido-Tan and Commissioners Juanito G. Espino Jr. and Heidi L. Mendoza, and was also one of the commitments of the Aquino administration to the Open Government Partnership (OGP). A participatory audit is not an entirely new idea in the COA. In 2000, the Commission partnered with the Concerned Citizens of Abra for Good Governance (CCAGG) to pilot a participatory audit in the Cordillera Administrative Region. In 2012, however, COA had taken steps to institutionalize the CPA, elevating it beyond its “project” status. From 2012 to 2017, phases I and II were implemented. These covered the different processes and stages to install the CPA as a permanent strategy and technique in the Commission. The CPA was institutionalized in February 2018. This learning note describes the concept, development, and implementation of the CPA during the term of Chairperson Tan (2012–2014), and it refers to whatever documentation was available during that period. This reflects her initial concept and the steps and directions the COA took during her term. The general direction and objectives continue, with some changes, during my term as chairperson of the Commission, and I hope that the CPA will continue to embody the true principles of participatory good governance. Michael G. Aguinaldo Chairperson Introduction / v “  he CPA is T founded on Introduction the premise that public Citizen Participatory Audit in the Philippines: Learning Note The Citizen Participatory Audit (CPA) is a broad program by the Commission on accountability Audit (COA), the Supreme Audit Institution (SAI) of the Philippines, that provides: can prosper only with a ◆ a a strategy for reform to uphold the people’s primordial right to a clean government and the prudent utilization of public resources, founded on vigilant and the premise that public accountability can prosper only with a vigilant and involved citizenry, for the promotion of transparency and effectiveness; informed citizenry. It ◆ b a technique in conducting audits with citizens as members of COA audit teams to make the government more effective, transparent, and provides a way accountable; for citizens ◆ aand c mechanism for strategic partnership and sharing of aspirations, goals, objectives between the COA and civil society; and to be directly ◆ COA’s work as partners. d a technique for citizen and civil society involvement in other areas of the involved in the public audit The COA first launched this priority program in November 2012. and to find for The CPA is founded on the premise that public accountability can prosper only with a themselves vigilant and informed citizenry. The CPA is a recognition of the people’s fundamental ways that they right to make government accountable for its actions. It provides a way for citizens to be directly involved in the public audit and to find for themselves ways that they can contribute can contribute to prudent use of public money. Therefore, the CPA forms a strategic to prudent use partnership with citizens and their shared goals and objectives.1 of public ” 1  “Operational Guidelines for the Citizen Participatory Audit Project,” November 16, 2012, which supported the money. implementation of pilot phase 1 of the CPA. The COA is in the process of releasing new guidelines in the Citizen Participatory Audit as part of the institutionalization of the program. vi  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) In November 2013, the CPA won the Bright Spot award This study also recommends alternative ways for citizens to in the Open Government Partnership Annual Summit in engage in public audits. London. The CPA was one of seven short-listed nominees for the award. Phase I of the CPA was funded by the Australian government through the Australian Agency for International This learning note documents Development (AUSAID) project titled “Enhancing Transparency, Accountability, and Citizen Participation in ◆ a the structure of the CPA, the Public Audit Process.” That project was implemented by the Affiliated Network for Social Accountability in East Asia ◆ b the process of engaging citizens, and the Pacific Foundation (ANSA-EAP) as COA’s Civil Society ◆ c the pilot audits undertaken in 2012–2014 (phase I), Organizations (CSO) partner. COA was and is extremely ◆ d the lessons learned, and grateful to ANSA-EAP for the collaboration forged for the successful implementation of the CPA. ◆e the measures that have been taken to institutionalize the CPA to mainstream the mechanism in the regular audit work of the COA. Mandate and Authority  /  1 1 Mandate and Authority Constitutional and Legal Mandate The Commission on Audit (COA) is an independent constitutional commission. Hence, it is a government agency that was created by the Philippine Constitution independent of the executive, legislative, and judicial branches of government.2 The COA is vested with the power, authority, and duty to examine, audit, and settle all revenues and receipts of the government, as well its expenditures, funds, and properties.3 Significantly, it has exclusive authority “to define the scope of its audit and examination, establish the techniques and methods required therefor[e], and promulgate accounting and auditing rules and regulations.”4 The constitution also declares that the state shall encourage nongovernmental, community-based, or sectoral organizations that promote the welfare of the nation,5 and it recognizes the right of the people and their organizations to effective and reasonable participation at all levels of social, political, and economic decisions.6 The constitution likewise recognizes the vital role of communication and information in nation building.7 The CPA is anchored on and animated by those constitutional provisions. It fuses the exclusive authorities vested in the COA with the state’s policies on citizen empowerment and nongovernmental organizations and the vital role of communication and information. 2  Philippine Constitution of 1987, article IX-D, section 1(1). 3  Ibid., article IX-D, section 2(1). 4  Ibid., article IX-D, section 2(2). 5  Ibid., article II, section 23. 6  Ibid., article XII, section 16. 7  Ibid., article II, section 24. 2  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) Government Policy and Programs to Ensure Direct, Immediate, and Substantial Benefits for the Poor” under an OGP framework9 and listed a participatory On June 30, 2010, Benigno S. Aquino III was sworn in as the social audit for public infrastructure projects among its 15th president of the Philippines. At the top of Aquino’s commitments. Then the CPA was included among the platform of government was “transparent, accountable, and priority activities under the Philippines–Australia Public participatory governance.”8 Accordingly, citizens’ access to Financial Management Program.10 information and participation in governance became an integral part of the Philippine Development Plan, 2011–2016. Consequently, the TWG was constituted into the participatory audit project management team. The project In response, the COA’s new leadership immediately team was composed of eight director-level members from established a technical working group (TWG) to explore the different operating and administration sectors of the ways for citizens to be constructively engaged in public COA and four engineers from the technical services unit.11 audit. TWG produced a structure and process framework Its major task was to implement the project work plan and for the CPA and for initial discussions with the Philippine to manage the project resources. Department of Budget and Management for funding support and the Philippine Department of Public Works and The project team was the COA’s main contact with ANSA- Highways (DPWH) for a possible pilot audit. EAP, and it coordinated all joint activities under the project. Those activities included capacity building and training The Open Government Partnership (OGP) was established programs for COA personnel and selected officers and in September 2011, with the Philippines as a founding members of CSO partners as participants before the launch member. The government adopted a national action plan in of the first pilot audit. 2012 titled “Institutionalizing People Power in Governance 9 See 2012 Philippine Government Action Plan: Institutionalizing People Power in Governance to Ensure Direct, Immediate, and Substantial Benefits for the Poor (Washington, DC: Open Government Partnership, March 2013), https://www.opengovpartnership.org/sites/default/files/Phil%20OGP%20 Country%20Assessment%20Report%20%281%29.pdf 10  See the organization’s website at https://dfat.gov.au/about-us/ publications/Pages/philippines-australia-public-financial-management- program-pfmp-independent-evaluation-2014.aspx 8  Executive Order No. 43 of May 13, 2011, section 2(a). 11  COA Office Order No. 2012-841. CPA Objectives  /  3 2 CPA Objectives The CPA’s goals can be summarized under three main outcomes: ◆ a a citizenry that is educated about government auditing through hands-on and practical experience; ◆ role in public accountability; b a citizenry that appreciates, asserts, and exercises its unique and sovereign ◆ c a government that is more accountable and transparent at all levels. On the other hand, generally the objectives of a particular CPA engagement are to determine the efficiency, economy, and effectiveness of the project selected.12 If red flags appear during the course of the audit suggesting fraud, the audit team must refer such findings to the COA Fraud Audit Office for evaluation and appropriate action. 12 All pilots undertaken during pilot phase 1 that are documented in the learning note were essentially per- formance audits. The CPA program has evolved over the years, and it is now used for financial audits (that is, in validating the existence of project accomplishment in aid of financial audits). 4  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) 3 The Structure and Process “ The CPA is a value-for-money or performance audit conducted by the COA itself  he CPA is T according to its mandate; members of the audit team are selected from CSOs. It is not a joint audit with citizens, nor is it a parallel audit by CSOs and the COA. It is an official an official government audit conducted by the COA. audit The CSOs that agree to participate in the program are referred to as CSO partners, conducted and their members who are selected as CPA team members are referred to as citizen by the auditors. Their participation is voluntary and unpaid, except for their board and lodging, ” transportation, and other appropriate support expenses. COA. During the pilot phase of the CPA, the duties and responsibilities of CSO partners and citizen auditors in the CPA are primarily governed by the “Operational Guidelines for the Citizen Participatory Audit Project,” which was issued by the COA, and by memoranda of agreements executed between the COA, the CSOs, and citizen auditors.13 These documents provided for management and implementation arrangements, for the respective duties and responsibilities of the parties, and for dispute resolution. 13 “Pro Forma Memorandum of Agreement with CSO Partners;” “Pro Forma Memorandum of Agreement with Citizen Auditors.” The Structure and Process  /  5 Essential CPA Processes Every CPA has 11 essential processes as follows:14 “  he COA selects T government projects of high value and high ◆ 1 Identifying the subject of audit impact that can be ◆2 Determining the nature and scope of citizen participation properly audited in a ◆3 Identifying CSO partners period of four months or ” ◆4 Building a shared agenda shorter for the CPA. ◆5 Building capacity of citizen auditors ◆6 Preparing the audit plan High-value and high-impact projects are determined by the ◆7 Conducting an initial conference with agency to following: be audited ◆ ›› The degree of closeness, importance, or urgency of 8 Gathering data and conducting fieldwork the project to people’s everyday life ◆9 Reporting audits ›› The project cost and vulnerability to corruption ◆ 10 Conducting post-audit assessments ›› The extent of affected geographic or demographic area ◆ 11 Monitoring recommendations ›› The risk to life, to property, and to conflict ›› The expected improvement in the lives of the intended beneficiaries For the first pilot audit, the COA handled the first three The pilot audits were selected primarily from field data processes. The fourth process of building a shared agenda from regular audits conducted by the COA, intake from its was undertaken with the identified CSOs and their nominee citizen’s desk, and inputs from the citizen auditors and CSO citizen auditors. Processes 5 through 10 were undertaken partners. with the citizen auditors. The final process was handled by both the citizen auditors and CSO partners. Composition of Audit Teams Subject of CPA For every CPA, a special team is constituted that is headed by the director of the cluster or region that has jurisdiction As a rule, the COA selects government projects of high over the agency that implements the project or program to value and high impact that the CPA can properly audit be audited. The director exercises overall supervision of the within four months or less. audit, including the review of the audit report. A team supervisor exercises direct supervision and control of the team. The team supervisor ensures that the team complies with all applicable rules and regulations, professional standards, and COA audit policies and 14  As mentioned in another section of the learning note, CPA essential pro- procedures. The supervisor also sees that the audit cesses have been modified over time. Now, CPA engagement involves the objectives are met. following activities: (a) audit team general planning, (b) exploratory meeting and citizen buy-in, (c) capacity building, (d) signing of the memorandum of agreement (moa), (e) nominating the citizen partners, (f ) authorizing the cit- The team members are composed of COA auditors from izen partners and signifying conformity, (g) CPA team planning, (h) conduct- ing audit field work, (i) analyzing data gathered, (j) reporting on the audit the same cluster or region that has jurisdiction over the conducted, and (k) monitoring implementation of audit recommendations. implementing agency and the citizen auditors. 6  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) The CPA teams are called special audit teams because they are constituted precisely for the purpose; their operating ◆ e have a strong presence in their area of operations, and procedures and protocols, however, are practically the same as regular audit teams of the COA. An office order is issued setting forth the members of the audit team, the audit ◆ f have an established track record and credibility. objectives, and the duration of the audit. In every case, the head of the implementing agency is informed for proper The COA also considers CSOs that have current or existing coordination. partnerships with government agencies and show satisfactory implementation or completion of projects and A particular CPA may have more than one team, depending undertakings. on the nature, complexity, and geographic extent of the project that is the subject of the audit. In any case, a team On the whole, the CSO partners in phase I have all been leader heads each team, although there is only one director established and are highly reputable organizations whose in charge and one supervisor. Each of the pilot audits advocacies mostly focus on undertaken in 2012–2014 (phase I) had at least two teams and at least two citizen auditors on each team. ◆ a good governance through infrastructure watch, Nature and Scope of Citizen Participation ◆ b procurement and budget processes oversight, Generally, citizen auditors are assigned less technical work ◆ c grassroots empowerment, and such as conducting surveys, taking inventories, conducting ◆d integrity initiatives. physical inspection, taking simple measurements, and the like. However, if the citizen auditor has a demonstrable and They come from practically all major interest groups of proven expertise such as engineering, law, or accounting, civil society: professionals, students, the church, and the more complex and technical assignments can be given, urban poor; parents and teachers; health workers; and such as document review, technical inspection, and account the like. Their nominees to the audit teams have likewise analysis and reconciliations. been long involved in CSO work, consultancies, project monitoring and evaluation, community organization, Selection of CSO Partners social reform, and rural and urban development. Many A citizen auditor is nominated by a CSO. The individual of the nominees are professionals—engineers, social must be a bona fide member of the CSO in good scientists, communication specialists, accountants, or standing. For every CPA engagement, the COA selects CSO academicians. They constitute a multidisciplinary group partners whose advocacies and objectives—in the COA’s that has enriched the perspective and methodologies of evaluation—are aligned with the nature and purposes of the CPA teams. the project to be audited. CSOs with a significant presence in the project’s area are preferred. As of the end of phase I, 22 CSOs were qualified and rostered as potential CSO partners. Of those organizations, To be selected, the CSO partners and members must 16 were selected and participated in the pilot audits. Role of ANSA-EAP ◆ a not have any conflict of interest with the project and the implementing agency, The successful engagement of the COA with CSOs and citizen auditors was enabled in large measure by the ◆ b have complied with the tax laws, Affiliated Network for Social Accountability in East-Asia and ◆ c be willing to engage without remuneration, the Pacific (ANSA-EAP) through the project “Enhancing ◆ manner, d be able to mobilize for the project in a timely Transparency, Accountability, and Citizen Participation in The Structure and Process  /  7 the Public Audit Process.” The project was funded by the government of Australia. Through a memorandum of agreement, ANSA-EAP agreed to provide technical expertise to guide the COA to tap into the CSO community for the CPA and to work with the community. This assistance was most valuable because ANSA-EAP—an established and highly credible CSO—has a wide network of CSOs and an intimate knowledge of and rich experience with Philippine CSOs. In effect, ANSA-EAP walked the COA through the world of CSOs and greatly helped it to understand the peculiar nature and working protocols of its CSO partners. ANSA-EAP provided the COA with assistance in the following areas: ›› Identifying partnership parameters with CSOs and the terms of engagement with them ›› Identifying a pool of CSOs for consideration as CPA the audit, and so forth. This step was necessary for the partners interested CSOs to determine if the specific audit was ›› Developing and implementing a capacity program for in their area of expertise and if they had members who both the COA and the CSO partners to build a shared qualified for the audit’s requirements. Thus, the information agenda drive was likened to soliciting expressions of interest, and ›› Establishing a public information system for the CPA the town hall meetings were likened to a prequalification ›› Generating tools and knowledge-sharing platforms process. In the first pilot, for example, five CSOs expressed interest, but only three eventually decided to participate. Building a Shared Agenda Selection, Roles, and Responsibilities The COA and ANSA-EAP conducted an information drive among ANSA-EAP’s affiliated CSOs in three strategic of Citizen Auditors locations in the country. The twin objectives were to The CSOs that decided to participate in the particular CPA introduce COA and potential CSO partners to one another engagement enter into a memorandum of agreement and to introduce the CPA to the CSOs. This joint activity with COA and thereby become CSO partners. They then proved valuable in refining and enhancing the terms of nominate their members who have been capacitated and engagement and the training session for COA personnel on who are eligible to be members of the audit team for the working with CSOs. The information drive built trust among particular audit engagement. the organizations and established a shared agenda. Within a month, the COA launched the first CPA pilot. The CSO members nominated to the audit teams must likewise meet the same qualifying requirements for the For each CPA during phase I, it conducted an information CSO of which they are members. They must also be of drive for each of the audits in a specific manner suitable good moral character. Once qualified, and if they accept to the audit. As soon as the potential CSO partners for a the appointment, they are issued a mandate letter by the particular CPA engagement were identified and approved COA chair (or his or her authorized official) to enter into their by the COA, they were invited to a series of town hall roles and responsibilities as audit team members.15 meetings about the specific CPA. The series discussed the audit objectives, the audit subject, the role of citizens in 15 “Operational Guidelines for the Citizen Participatory Audit Project,” part IV.D.2, November 16, 2012. https://cpa.coa.gov.ph/policies/ 8  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) The essential roles and responsibilities of the citizen auditors also allows members (a) to get to know one another and are as follows: build rapport and (b) to learn and appreciate accountability principles, the rudiments of performance audit, and audit ›› They must perform their assigned tasks in the audit procedures and techniques. competently and diligently. To ensure transparency, transfer of knowledge, and adherence to professional Nominees who then agree to participate as citizen auditors standards, they will be paired with counterpart team enter into a memorandum of agreement with the COA and members who are COA auditors. are issued corresponding mandate letters to perform their ›› They have the right to participate in all phases of the assigned tasks. audit—from planning to execution and from reporting to follow-through of recommendations. Joint Audit Planning, Execution, ›› They will at all times be under the direct supervision of the team leader (director-in-charge of the CPA team). and Reporting Any disagreement or differences of opinion between The citizen auditors help prepare the audit plan and the the citizen auditors and COA are to be resolved at the audit work steps. From this point, the citizen auditors either team level. work on their assigned tasks with the COA auditors or work ›› They must serve without remuneration; however, on their own, depending on the nature and scope of such lodging, transportation, and incidental expenses will tasks and the degree of manageable autonomy. be provided where proper and warranted. ›› They must strictly observe all requirements of confidentiality and turn over all audit papers and documents to the team leader. Therefore, the citizen auditor stands on the same footing as any COA member of the team, with practically the same roles and responsibilities. Once deputized through the mandate letter, the citizen auditor does the following: ›› Receives the same level of access to information and documents related to the audit as all members of the audit team ›› Is bound by the same protocols and principles that safeguard against the obstruction of an efficient, effective, and independent audit, such as premature disclosure of audit findings ›› Has the right and is expected to participate in the entire audit, with his or her input on methodologies and approach bearing equal weight as that of any other audit team member For the pilot audits, however, the citizen auditors always worked in tandem with their COA counterparts or with the audit team as a whole. To better integrate the audit findings Joint Capacity Building of the different teams and to educate the citizen auditors The members nominated by the CSO partners, who may with the rudiments of report writing, workshops were qualify as citizens-auditors, first go through workshops also conducted. The audit reports for the first three CPA along with audit team(s) constituted by COA to gain a engagements are posted on the COA website (www deeper understanding of the CPA, the selected subject of .coa.gov.ph) and on the now-discontinued CPA website audit, and their undertakings as participants. The workshop The Structure and Process  /  9 i-kwenta.16 The reports have also been consolidated into the annual audit reports of the respective implementing agencies: the DPWH, the government of Quezon City, and the government of Marikina City. The fourth audit, which is about certain relief activities following Typhoon Haiyan, is a stand-alone report. Joint Post-Audit Assessment In the course of the audit, team members must communicate openly. Team members meet regularly to monitor progress and address areas of concern. After the report is completed, the citizen auditors and the CSO partners assess the overall experience, results, and lessons learned in a debriefing and reflection session.17 16 Recently, COA has discontinued the i-kwenta website; instead, it has revamped the COA website and created a dedicated page for the CPA, https://cpa.coa.gov.ph/ 17  This is one of the activities identified in the CPA framework that is adopted by the COA resolution institutionalizing the CPA. 10  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) 4 Professional Responsibility Standards and Accountability The Operational Guidelines18 call for the involvement and participation of the CSO partners in the CPA and of the citizen auditors in the audit teams. They further require that the teams “shall at all times be under the direct supervision and control of the COA.” This stipulation is reiterated in the agreements and incorporated by reference in the nomination and mandate letters. Accordingly, any disagreements or differences of opinion between the citizen auditors and COA are to be resolved at the team level. If the members do not resolve their disagreements, the chair will, and the chair’s decision is final and cannot be appealed.19 The director or the team supervisor and team leaders interact with the agency being audited and discuss the audit team’s observations and issues. Such interactions are generally independent audit actions under their authority. This procedure is followed because the CPA is an official audit of the COA as an SAI, not a joint or parallel audit with citizens. It requires that professional standards be applied to the particular competence of the COA and its auditors, which they are duty bound to strictly observe. The COA alone is accountable for the audit. Ownership and Governance The agreements also require that the parties “shall respect each other’s internal structure, rules, and procedures but shall ensure strict compliance with government standards and policies.”20 The auditing rules of the COA therefore govern the management and conduct of the CPA. 18 Operational Guidelines refers to the guidelines used for the pilot phase 1 of the CPA, https://cpa.coa.gov .ph/learning-materials/. file:///C:/Users/wb305571/Downloads/COA-Resolution-2018-006-dated-1-feb-2018- adopting-institutionalizing-the-CPA-1.pdf 19 https://cpa.coa.gov.ph/learning-materials/ 20 Ibid. Professional Responsibility  /  11 As stated above, a CPA team is always headed by a director, Confidentiality a team supervisor, and a team leader, all of whom are According to the agreements, the CSO partners and COA personnel. The director exercises overall supervision citizen auditors may not divulge information they acquired of the audit and reviews the audit report. The team through their audit work to unauthorized persons. Nor may supervisor directly supervises and approves the audit they release such information before the audit report is plan. The team leader heads the team that executes the officially received by the implementing agency. Breach of audit in accordance with the audit plan and compiles the this provision is grounds for terminating the agreements permanent working papers file. The citizen auditors execute and filing charges against the defaulting party. their assigned tasks in accordance with the audit work steps. The director, team supervisor, or team leader issue all audit reports and all communication to the implementing agencies and third parties in the name of the COA using protocols of the COA. The COA owns all working papers, audit evidence, and other papers and documents. 12  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) 5 The Pilot Audits Flood Control (KAMANAVA) The Philippines is prone to flooding, especially low-lying areas in Metro Manila. The KAMANAVA area—a cluster of four highly urban cities (Kalookan, Malabon, Navotas, and Valenzuela) that is located in the estuary of a river flowing into Manila Bay—is particularly affected. Most of KAMANAVA used to be devoted primarily to fishponds. For decades, the residents of KAMANAVA have had to endure the damage of floods on their lives, property, and economic life. In 1998, the Philippine government approved a large flood control and drainage system improvement project for the DPWH to implement with funding support from the Japan Bank for International Cooperation. Construction of the project began in 2003 and was completed in 2012, a considerable delay from the original five-year schedule envisioned at the onset in 1999. This project fit the “high-value, high-impact” criteria of the CPA and became the first pilot case. Audit Objective The objective of the audit was to determine whether the flood control and drainage project had mitigated flooding in the KAMANAVA area and thereby improved the living conditions and promoted economic activities of the said area. Audit planning and execution took four months, and analysis and reporting took another three months. Citizen Partners The CSO partners were the Concerned Citizens of Abra for Good Governance, Diaspora for Good Governance, and International Alert–Philippines, all of which advocate good governance and citizen action as catalysts for local development. The Pilot Audits  /  13 Five citizen auditors helped (a) develop questionnaires, is the smallest political unit of any local government (b) conduct surveys and focus groups among the project- and therefore is a microcosm of LGU governance and site residents, (c) gather data, (d) conduct physical administration. inspections, (e) analyze data, and (f ) write reports. Audit Objectives Significant Audit Findings The audit sought to determine if Quezon City had complied The project has not completely mitigated flooding because with the law and implemented its solid waste management of plan. It also sought to determine the extent to which citizens of Quezon City had come to perceive it as a clean ◆ a deficiencies in the design and construction of structures such as the polder dike in Malabon and city.22 The audit was conducted for two months, and the analysis and the report writing were done in four months. link rods of the navigation gate; Citizen Partners ◆ b the DPWH’s improper control and monitoring of the retention and installation of concrete pipe The CSO partners were Pinag-isang Samahan ng mga gates or tosangs for fishponds; Magulang (PINASAMA), an organization of day care workers and parents operating in urban poor communities; ◆ the c existence of informal settlers and the large volume of garbage in the site; Kapitbisig Homeowners’ Association Buklod Kalinga, an association of health workers and advocates operating in ◆ as the absence of desilting work; and d poor operating and maintenance work, such 21 one of the covered barangays; university summer interns majoring in development communications; and ANSA-EAP. ◆ communication. e inadequate staffing and facilities for Twenty-two citizen auditors helped design the survey questionnaire and conducted house-to-house surveys. The questions largely focused on community awareness of solid Two strong typhoons (namely, Gener, which occurred in waste management and of the LGU’s implementation of 2012 and Pedring, which occurred in 2011) severely tested the plan, and the survey questioned community members’ the structures and exposed their deficiencies. satisfaction with their surroundings. The citizen auditors also helped prepare the audit report. Solid Waste Management (Quezon City) Significant Audit Findings Garbage collection and disposal has also been a pernicious problem in Metro Manila that affects the daily life of Quezon City established a solid waste management board, citizens. In 2001, the Ecological Solid Waste Management but some members did not have the technical expertise Act became law, thus giving local government units (LGUs) required by law. Moreover, the implementation of the the primary responsibility for implementing solid waste solid waste management plan was shifted to another management in their localities. For this purpose, each LGU department of the LGU and not undertaken by the board must establish a Solid Waste Management Board to prepare itself. Furthermore, the plan was not updated regularly. and implement a comprehensive plan to manage solid waste. The plan must be reviewed and updated every two Information campaigns on waste management were found years. to be satisfactory.23 Of the respondents, 75 percent said that they practiced waste segregation, and a majority rated the This pilot audit covered three barangays of Quezon City, city “clean.” which is the largest city of Metro Manila and constitutes about 25 percent of Metro Manila’s land area. A barangay 22  It also sought to determine what they know about the activities of Que- zon City and the contractors on the information and education campaign, promotion of solid waste segregation, timely collection and proper han- 21  Thecity governments of Caloocan, Malabon, and Navotas failed to per- dling of solid waste, and cleaning of thoroughfares and litter-prone areas. form their responsibilities embodied in the memorandum of agreements 23  A majority of the respondents were aware of information and education with the DPWH after this item. campaigns on solid waste management. 14  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) Primary Health Care (Marikina City) facilities. Potable water was also lacking in one health center.25 The barangay is also at the forefront of the Philippines’ basic public health care through health centers established and maintained by LGUs. The centers mostly cater to the Disaster Aid and Relief (Haiyan) poorest sectors of the community. For this pilot, residents of Aside from being prone to floods, the Philippines also Marikina City24 who were beneficiaries of the government’s suffers from devastating typhoons regularly. In November Conditional Cash Transfer (CCT) program—those living 2013, Typhoon Haiyan brought catastrophic damage to life below the poverty threshold—were selected for coverage. and property. Rebuilding continues with much help from the international community. Audit Objectives The audit sought to determine the compliance of the Considering the magnitude of the relief operations that barangay health centers with the requirements of the immediately followed the event and the number of Philippine Department of Health and Department of Social government agencies that were involved in the typhoon Welfare and Development their effectiveness in serving aftermath, the COA decided to immediately conduct a the CCT beneficiaries. The audit was conducted for three government-wide audit on disaster aid and relief, closely months; analysis and audit report writing were conducted following on the heels of the relief operations. The COA over another three months. did so instead of conducting a post audit of the entire operations after completion of the relief intervention, a Citizen Partners practice that is the norm in regular audits. ANSA-EAP and the Ateneo School of Government were the COA’s CSO partners in this engagement. The community In the course of the audit, the COA itself was overwhelmed scorecard and focus groups were the main audit tools. There with the extent of the work to be done and needed to were 31 citizen auditors who administered the scorecard augment its complement of auditors. The CPA model came to barangay health workers, other health professionals, the in handy; thus, whereas disaster aid and relief were not covered CCT beneficiaries, and parent groups. As in the among the approved CPA pilots under phase I, the COA other CPA engagements, the citizen auditors helped analyze decided to engage citizen participation in the audit of the data and prepare the audit report. procurement and distribution of relief goods. Significant Audit Findings A separate CPA was undertaken for the cash-for-work (CFW) program and for bunkhouse construction that the Because demand for primary health care was so high, the government had adopted as short-term solutions. This CPA effectiveness of the health centers was severely hampered. was funded by the World Bank. The ratio of doctors and nurses to patients was extremely low, staff members were overworked, and a severe shortage of medicines resulted in incomplete dosages. The health centers had only basic medical equipment, 25  Assessed against the Quality Standards List, the barangay health centers which in many cases was old and overused. The center (a) were accessible to public transportation, except for the Malanday BHC; facilities were also inadequate; there were not even birthing (b) were well lighted but ventilation was inadequate; (c) had inadequate waiting areas; (d) had potable water, except for the Nangka BHC; (e) had inadequate comfort rooms or toilets which did not have handrails; (f ) prac- ticed good solid waste management, except for Fortune BHC; (g) had an inadequate number of health professionals (ratio to patients was extremely low such that they could hardly cope with the demands of the services); (h) had health service providers rated as generally courteous; (i) had basic medical equipment but functionality could not be guaranteed as most of the equipment had seen years of continuous service; (j) had inadequate 24 Specifically, Marikina City’s health centers located in Barangays Tumana, essential medicines, but nonessential medicines were available partly Malanday, and Nangka, and the Pugad Lawin Health Center in Barangay For- because medical service providers lacked a method to give inputs to pro- tune were selected for coverage because they had the largest number of curement; and (k) had the full complement of health center programs and enrolled 4Ps beneficiaries from all 17 barangay health centers of the city. services (except birthing and lying-in facilities). The Pilot Audits  /  15 Audit Objectives For the first time, geo-tagging as an audit tool was used The objectives of these audits were (a) to determine to validate the existence and location of the bunkhouses. the efficiency of the relief operations and to assess World Bank experts trained COA personnel and citizen the government’s level of adherence to accountability auditors on geo-tagging. requirements in emergency and urgent responses; (b) to establish whether the purposes, timelines, and mechanics The audit of the relief operations took at least six months, of the CFW and bunkhouse projects were being met; (c) to whereas the CPA of the bunkhouse and CFW projects took find out whether the projects were beneficial; and (d) to five months. ensure that the beneficiaries were eligible. The audit on relief operations was conducted in 2013, and the CPA on Significant Audit Findings the bunkhouses and CFW program was conducted in 2014. Recently, the audit report on the relief operations has been issued and uploaded on the COA website.26 Significant Citizen Partners audit findings included In view of the urgency and the nature of the projects, CSO partners that had sufficient technical knowledge and strong ◆ a low use of donor and budgeted funds; presence in the affected areas were selected—namely, the Leyte Family Development Organization Multi-Purpose ◆ b procedural lapses and deficiencies in accounting and in documentation and recording of receipts Cooperative, International Holistic Engagement for Life and disbursements; and Progress, Philippine Relief and Development Services, Philippine Institute of Certified Public Accountants, ◆ problems c and with procurement and contracting; Philippine Institute of Civil Engineers, and Junior Philippine Institute of Accountants. The latter is composed of students who are majoring in accounting and who are expected to ◆ warehousing, and goods delivery. d poor management of inventory, supplies, be ready without special training for the engagement. Hundreds of citizen auditors participated in the relief As for the CPA on the bunkhouse and CFW programs, the audit operations audit, and 22 took part in the CPA of bunkhouse report is yet to be released. When released, the audit report will and CFW projects. They helped plan the audit and identified be available on the COA’s website (www.coa.gov.ph) the tasks for which they were particularly competent. They helped ◆ a validate procured and donated goods, logistics flow and processes, construction accomplishments, and compliance of beneficiaries with eligibility requirements; ◆ b conduct interviews, surveys, and technical inspections; and ◆ c review various documents. 26  See https://www.coa.gov.ph/disaster_audit/doc/Yolanda.pdf 16  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) 6 Issues and Lessons Learned Addressing Resource and Capacity Gaps Funding support was given by AUSAID, and it was implemented by ANSA-EAP. Funding gaps had to be addressed in the COA’s internal budget27 because the government did not give financial support to the CPA until 2015. The CPA also required more human resources from the COA. A series of command conferences and workshops brought about middle management buy-in. Furthermore, key middle managers had to double up from their regular audit work to act as resource persons and trainers in the CPA processes and in ways to relate to CSO partners and citizen auditors. Temporary measures bridged the gap. The limited resources of many CSOs are also a striking issue, especially because CSO participation is unpaid. Audit work is highly technical, and auditors require cumulative experience to reach the desired level of proficiency. Therefore, building capacity of the citizen auditors—most of whom had no previous training or experience—posed a great challenge. This challenge was addressed by previous capacity building exercises for each CPA and by matching each citizen auditor with a COA auditor on the team. The COA counterpart served as both a buddy and a coach. Coupled with regular team meetings, this arrangement not only fostered learning but also teamwork, better rapport, and knowledge sharing. Identifying Institutional Differences The COA is a government institution and a constitutional commission, and CSOs are essentially private sector groups. Therefore, institutional differences abound in orientation, approaches, and levels of commitment. 27  The COA included a budget of 5 million Philippine pesos in its proposal submitted to the Department of Budget Management in 2014, which was approved and become part of the General Appropriations Act. Issues and Lessons Learned  /  17 As a cadre of professionals and public servants, the COA is The commitment and direct, personal involvement of duty bound to observe professional standards; all relevant the head of SAI were also considered crucial to the CPA’s laws, rules, and regulations; and established protocols. success. The COA chair attended sessions with the CSO The COA cannot be rushed into taking action when partners and citizen auditors to underscore (a) the high judiciousness and circumspection must prevail. It puts great priority of the CPA in the COA’s reform agenda and (b) the value on due care, skepticism, and proper documentation value and confidence that the COA held in its CSO partners as key elements of public sector audit. and citizen auditors. The chair personally addressed questions and concerns, and she exhorted all participants Conversely, given that CSOs are rarely specialized in public to persevere and give the CPA their best efforts at oversight auditing, they may rush into quick conclusions and form and governance. immediate opinions on the basis of preliminary evidence. Through the CPA, however, the CSOs and citizen auditors Identifying CSOs for a particular CPA engagement and were able to access behind-the-scenes information and inviting them to an information and promotion workshop underlying conditions. As one citizen auditor said, “Now we was cumbersome and limiting. Only CSOs with a substantial know why state auditors do not give opinions immediately; presence in or access to Metro Manila participated. The they have to follow processes and protocols.” process worked more like a headhunting exercise. Hence, with suggestions from the CSO partners, this process was These institutional differences were anticipated. Hence, reconfigured into a roadshow for all CPA engagements. In the nonnegotiable terms of reference ensure that (a) the effect, the information drive conducted before the launch CPA must at all times be under the direct supervision and of the first pilot was revived, expanded, and made into a control of the COA, (b) both parties must strictly comply continuing and regular activity. The COA went to the CSOs with government audit standards and policies, and instead of having the CSOs come to the COA. (c) disputes and differences in opinion must be settled by the COA with finality. Thus, four regional roadshows were conducted between 2012 and 2014: one in each of the three main island groups of the Philippines—Luzon (Baguio City), Visayas (Iloilo City), Building Trust and a Shared Agenda and Mindanao (Davao City)—and one in Metro Manila. Open lines of communication, reflection sessions, workshops, consultation, and dialogue were the main tools The main objectives of these roadshows were to inform for bridging these differences. Candor was emphasized and the CSO community of (a) the CPA and its progress, (b) the encouraged. Such an approach also served well to build important role of the CSOs in the program, (c) the pursuit trust and a shared agenda among the COA, its CSO partners, of good governance through a collaborative approach, and citizen auditors. and (d) the shared agenda of the COA and the citizens. The roadshows proved to be powerful listening sessions Given the novelty of the program, it was important to and provided not only a database of CSOs but also, and take a hand-holding approach and to closely mentor and more important, rich sources for improving the CPA and coach the citizen auditors on the intricacies of public audit. developing alternative modes of citizen engagement in The approach fostered greater trust among the state and public audit. citizen auditors, who benefited from learning from one another, from understanding one another’s perspectives, The demonstrated success and outcomes of the pilots and from sharing a common agenda. Thus, in the phases further strengthened the trust of the CSOs in the program of analysis and report writing, there were hardly any and in the sincerity and commitment of the COA to citizen disagreements on the audit results and recommendations. engagement. Moreover, the implementing agencies and For the few disagreements that arose, the CSO partners and survey respondents openly welcomed the citizen auditors citizen auditors readily yielded to the COA’s decisions and as audit team members, thereby boosting their confidence prerogatives. and morale. 18  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) Creating a Sustainable in January 2015 with funding support from Australia’s Department of Foreign Assistance and Trade, and the World and Institutionalized Process Bank. At the very outset, it was planned that if phase I should prove successful, the CPA would become a regular In light of the nationwide expansion of the CPA, the COA’s audit program of the COA and would survive changes professional and institutional development sector led a in leadership. With the very encouraging results of the targeted effort to build the capacity of more COA personnel first three pilots, the COA took steps to sustain and in the ways and requirements of the CPA. The COA’s institutionalize the process starting in 2014. development sector would also share the tools generated, the methodologies and structures developed, and the Among others, the CPA was placed under the special lessons learned from training with the regional offices, in audits office of the COA, which, until then, handled only particular. government-wide multi-sectoral performance audits, fraud audits, and technical services. With this organizational Discussions with the Philippine Department of Budget reform, the CPA received recognition and attention as a and Management for a regular budget also began. The regular audit function. The project team, however, was still budget request was approved, and the Philippine Congress retained under the chair’s office to handle coordination, appropriated a modest sum for 2015. The budget hearings administrative support, and secretariat functions, and to also gave the COA a platform to present the program and its manage the transition. initial successes to the Congress of the Philippines, a crucial step to gain key support to institutionalize CPA. The program also expanded to bring the CPA to the regions and to pilot it nationwide. A set of farm-to-market roads Likewise, sustainability is a major issue for the CSO partners. was selected for participation in the audit according to Although they pursue their respective advocacies for the the “high-value, high-impact” criteria. These roads were long term, none of them are focused solely on public constructed by different government agencies, both audits. Making CSOs commit to participate in the CPA for a national and local—a factor that also had to be considered. considerable length of time is challenging. Concomitantly, The COA’s regional directors would take charge of the funding support is a concern, especially as CSOs are not CPA in their jurisdictions, and the special audits office paid to participate in the CPA. would consolidate the results in a single report. This effort, which evolved into phase II of the program, was launched Outcomes   /  19 7 Outcomes An Enlightened and Accountable Citizenry The ringside view and hands-on experience of CSOs and citizen auditors in public audits have given both groups a better understanding and appreciation of public accountability and their peculiar role in making it a reality. CSOs and citizen auditors have experienced for themselves ◆ a what it takes to do a public audit; ◆ b the painstaking process an audit entails; ◆ c the proficiency and professionalism that process requires; ◆ d the meticulous details to consider and analyze; ◆e the dictates of fairness, due process, and standards that must be observed; and ◆f the perseverance and commitment auditors must possess to produce high-quality and credible audits. Consequently, CSOs and citizen auditors have learned to appreciate the tremendous responsibility of civil servants in general and state audits, in particular in promoting public accountability. CSOs and citizen auditors not only learned how public audits are undertaken, but also received an eye-opener on the constraints and challenges the government faces in delivering basic services to people. CSOs and citizen auditors also witnessed firsthand the inefficiencies and even outright incompetence and neglect of some government functionaries. As taxpayers, they were 20  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) outraged by such wasteful government spending. But they of knowledge and information on the CPA, and also as a also learned that they could impede government efficiency channel of communication with the public and civil society. and effectiveness by their own commission or omission. The citizen’s desk established at the chair’s office further In KAMANAVA, for example, citizen auditors realized that provides direct communication with citizens on any one of the reasons for the delay was the presence of concern. Citizens can even report misconduct of the informal settlements in the area. Reckless garbage disposal COA’s personnel. The primary modes of feedback are SMS by the residents of these settlements clogged the project messaging and e-mail. Anonymous reports are encouraged, site and impeded the work. provided the reports contain sufficient leads and can be verified. This reporting is another mode of citizen In Quezon City, citizen auditors saw the importance of engagement, and efforts continue to fold it into the public segregating garbage and vowed to do so henceforth. One information system for wider conversation with the public citizen auditor coined the following exhortation: “Limit your on common concerns. waste, learn to segregate, be aware, and do your share.” A More Involved and Vigilant Citizenry In Marikina City, citizen auditors realized the value of The CPA effectively opened greater areas of citizen feedback and expressions of appreciation from residents. involvement in governance. With their training and They committed to take the time and effort to attend experience from public audits, citizen participants can town hall meetings and the Mayor’s Day with citizens. They now more meaningfully engage with government on realized that they have the right to speak to their local public finance and spending. They have learned to better government about their primary health care facility and appreciate audit reports and, consequently, are better to be consulted on medicine procurement so that their prepared and show more confidence when implementing barangay health centers will have enough of the most audit recommendations. They have seen where needed supplies. government money is most needed and therefore are better equipped to get involved in the budgetary process. A Better-Informed Citizenry The previous experiences and reflections in this report are Citizen participants also grasp what it truly means to be shared with the public through the Project Management a “government of the people, by the people, and for the Office.28 That unit has been established as the primary people.”29 A government is not an esoteric cluster of link between the COA, the CSO community, and citizens institutions detached from its citizens; it is theirs to own, at large with respect to the CPA program, and it conveys shape, and care for. It is their collective voice, and they must information about the public audit. therefore speak up. The Citizen Participation Unit communicates two ways. The More significantly, citizen participants have learned first is the dedicated CPA website, where all information and the elusive lesson that government problems are their materials on the CPA that can be disclosed are uploaded, problems because they—the citizens—are a part of the including the audit reports and photographs of citizen government. They are therefore also a crucial part of the auditors in action. The website is linked to the COA website. solution, and they must not wait or rely on government institutions alone to solve problems. They must start with The second way is a public information system to allow themselves and strive for collective and concerted action to citizens to (a) follow up on and track the progress of any get the kind of government they desire. CPA engagement, (b) make inquiries, and (c) report cases of misuse of public money and properties. The system is envisioned as a central receiver, processor, and repository 29  Speech by Abraham Lincoln, November 19, 1863, Gettysburg, Pennsyl- vania. The quote belongs to Lincoln’s Gettysburg Address, which in the Phil- 28  Formerly the Citizen Participation Unit at the time of the pilot phase I. ippines has become an integral way of defining a democratic government. Outcomes   /  21 A More Accountable and Responsive In Quezon City, the mayor commended the CPA team and the audit results. The results were eye-openers, he said, Government especially the assessment by the city’s own citizens of the The act of citizens themselves conducting a state audit has solid waste management system. The mayor said, “We started a paradigm shift among government leaders and thought we were doing well enough; now we know that the bureaucracy as a whole. we need to intensify our efforts.” He advised that the survey be duplicated in the rest of the barangays not covered in In the Philippines, state auditors are an intimidating the CPA to get a full understanding of his constituency’s presence in any government agency. Audit teams sentiments on the matter. generally have to contend with the perception that the COA is a ferocious watchdog whose objective is to slap In KAMANAVA, the DPWH conceded that its obligation to government agencies with disallowances of expenditures. the people did not end with the completion of the project. This perception is due largely to the status of the COA as an It needed to use qualified personnel to properly operate the independent constitutional commission vested with almost structures and continuously maintain them in top working plenary powers of inspection. Those powers include the condition. As such, it would immediately take steps to get authority to disallow any disbursement of public money the required resources. that, in its sole determination, is illegal, irregular, excessive, unreasonable, or unconscionable. The implementing agencies have not only been quick in appreciating the deficiencies noted in the audits. They With citizen auditors on the audit teams, however, have also been swift in taking corrective action when the government agencies are constrained to be more deficiencies were reported to them. In KAMANAVA, the welcoming because their client and ultimate master—the DPWH immediately ordered the procurement of radio citizen—is conducting the audit as well. And the agencies equipment as soon as the department found that no learn that citizen auditors are professional and competent, equipment linked the different structures and operating working with exacting accountability. They are not merely personnel. The local government also immediately asking questions to acquire information. Hence, the agency unclogged the canals of garbage instead of waiting for the personnel are required to fully open the books for citizen DPWH—the implementing agency—to act. inspection and to justify their stewardship of tax money. No longer is just another bureaucrat looking at the books; it is This response from government to audit findings is the master of the house. uncommon. Usually, agencies take a bureaucratic approach and go through layers of authority that not only delay In Marikina City, for example, health centers made an effort the response but also use more resources than is actually to explain to the citizen auditors why their inventories necessary. lacked enough medicines that were needed but had more than enough of medicines that were not in great demand. Health centers pointed to procurement, where frontline A More Efficient and Effective SAI service providers were not being consulted on the actual For its part, the COA has gained a better appreciation of the needs of patients. The procurement office had been this value and practical benefits of partnering with CSOs and way for years, but it was not until health center providers citizens. They are not only an additional source of labor for met face to face with citizen auditors that they realized they the grueling work but also a listening post. The CSOs and needed to be more proactive in expressing their views to citizen auditors have shown what truly matters in getting their superiors if problems were to come to the attention their needs met and receiving desired responses from of decision makers. Before their interaction with citizen government. Their inputs will result in more focused and auditors, health center providers were content to simply responsive audits. list medicines received and medicines dispensed without analytics or recommendations. 22  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) The state auditors also learned from the CSOs on their with in the course of their work. They are used to receiving methods of research and data gathering. A significant little, if any, information from these citizens. audit tool generated and developed in the CPAs is the community scorecard. This tool brought a new dimension State auditors therefore took note of the bond of kinship to performance audit; it measures or otherwise assesses and common aspirations that developed between citizen the level of satisfaction of citizens with the effectiveness auditors and the people they surveyed. They saw that this of a particular project. Usually, state auditors would assess bond predisposed ordinary people to express their opinions effectiveness through objective and hard data. What the with candor and honesty. They appreciated the rapport intended beneficiaries of the project—the citizens—have and trust that developed between the interviewers and to say on the project would have hardly been taken into interviewees. account. If the pilot audits had not been participatory, the subjects This particular experience may highlight the value of the audit (that is, flood control, primary health care, (a) of collaborating with stakeholders (that is, affected waste collection, and disaster aid management) would communities, beneficiaries, and local public officials) and most likely not have received sufficient focus and scrutiny (b) of ensuring their understanding of the audit process during the audits. Moreover, the audit findings would not and its objectives. Gathering nonfinancial data such as have generated the immediate remedial attention of the public service users’ perceptions or level of satisfaction with responsible government functionaries. Most likely, the a project becomes much easier. The beneficiaries provide findings would have been just an item treated in passing more qualitative information about program implementation in the audit report. Yet the findings discovered were that otherwise would be quite challenging to access and to undeniably core concerns of the people and therefore gather using existing or traditional audit tools. needed to be the priority focus areas of any SAI. The citizen auditors also taught the state auditors Working with citizen auditors brings a refreshing vigor to relationship skills. The effect of these improved skills on the usual drudgery of audit work. More important, it stokes fellow citizens as the auditors carried out the surveys was the fire so needed from public servants to give their best also a practical learning experience for the COA. State in their work. The enthusiasm and commitment of the auditors are used to being treated with reservation by citizen auditors truly inspired the COA auditors to be more ordinary citizens, whom they often interview and interact accountable and competent public servants. The Way Forward  /  23 8 The Way Forward Institutionalization and Nationwide Rollout The adoption of phase II of the CPA in January 2015 sought to hasten the institutionalization of the CPA by expanding the coverage, the pool of trained COA personnel, and the participating CSOs and citizen auditors. However, without a corresponding change in the organization’s structure and funding, it may lose steam and simply dwindle. Moreover, other forms and entry points for citizen participation in public audit must be explored and developed. Organizational Restructuring and Retooling Were it not for the CPA program, the COA special audits office would have had to audit flood control projects, waste management programs, health center services, and disaster relief operations. The audits would have taken much longer to complete. Whereas the coverage and scope might have been greater in such an audit (that is, several projects or project sites could constitute a nationwide sample size), more COA staff members would have been required. The COA could not afford to provide such resources. The objective, indeed, was to roll out the pilots nationwide using the CPA model, which would have been managed and supervised by the special audits office through the regional or provincial COA offices. This method was thought to address the gap in human resources and allow the special audits office to concentrate on more complex and highly technical subjects of audit. The COA must be prepared to handle the additional work without impinging on the human resources required for its mainstream and other ancillary services. Whereas the special audits office is specially equipped for the demands of the CPA, it is responsible for two other types of audit that are even more demanding and specialized: fraud audit and government-wide performance audit. When overlapping schedules, limited human resources, and sheer volumes of work reach critical points, stressed managers may find it easiest to eliminate one type of audit in favor of another. 24  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) A more prudent approach would be to spread CPA work Budget Support among all audit sectors. At present, the COA has three To be sustainable, the CPA should not depend on funding regular audit sectors: national audit, which handles national from development partners. Innovative projects will always agencies; corporate audit, which handles government appear that development partners are better suited to corporations and other stand-alone special purpose support. entities; and local government audit, which handles local government units such as provinces, cities, municipalities, Therefore, regular budget support from government should and barangays. Those sectors should plan, organize, be secured. The appropriation made by the Philippine administer, and manage CPAs that involve agencies in their Congress for 2015 is a good start, and the significant progress respective sectors. The special audits office should provide and results of the CPA should justify a regular appropriation. oversight and continue conducting capacity-building exercises. Regular budget support will also build confidence among the CSO partners and thereby strengthen their commitment For that purpose, each of the three sectors could either and participation in the program. It is the partners’ (a) establish a separate unit for CPA work or (b) integrate in participation that is at the heart of the program; without it, their respective annual audit plans at least two CPAs, one the CPA could fade away. for each six-month period. As a unifying exercise, the three audit sectors should plan one cross-sector CPA each year or otherwise involve at least one agency in their respective Expanded Citizen Participation sectors. and Feedback To sustain citizen participation, the present pool of CSO Integrating the CPA in the three sectors’ annual audit plans participants must be expanded, as must the areas where will hasten including it in mainstream audit work, thereby they can get meaningfully involved. promoting its institutionalization. Integrating the CPA will also wean it from direct management by the chair’s The CPA has proven to be a harbinger of other forms of office through the current project team. Such a move will citizen participation in governance. It has multiplier effects: allow the CPA to better withstand the shock and other the knowledge and experiences gained by the citizens uncertainties that attend changes in top leadership. from and through the program dispose them to increased dialogue with the government on other issues, such as To be sure, this organizational restructuring will require public finance, budgets, and social development. capacity building and change management. But with the experience gained, the training and implementation Opening and Encouraging Other Forms modules established, and the tools that were developed in of Participation phase I, the required capacity building should not pose an Public audit offers a wide range of areas for engagement organizational problem. with citizens, which citizens themselves can initiate. A concrete example is a project proposed by a group of Retooling should also be pursued to make CPA work investigative journalists to document and make case more efficient and effective. The COA and its citizen studies of COA findings on the special education fund. The partners should build on geo-tagging and explore other journalists’ work primarily would inform the public, stoke crowdsourcing technologies and applications. The CPA vigilance, and spur public action to follow through with processes should also be included in the COA’s information the audit recommendations. In the case of the CPAs, the and communication technology infrastructure, without CSO partners and citizen auditors can be mandated by the diluting the ability for citizen partners to gain personal COA to continue to monitor and to follow up on the audit experience. The Way Forward  /  25 recommendations and to report to the COA on the status Whereas the COA is authorized to pay a fee for this kind of and progress of those recommendations. engagement, those professional groups have agreed to volunteer their services in Haiyan, and it is expected that Partnering with the media to open other venues and forms of the CPA and other professional groups will also volunteer citizen participation should therefore be vigorously pursued. their service. The important task is for the COA to forge an For example, a platform can be established where citizens agreement with them as permanent and institutional citizen can post and report cases. The platform should display partners. photographs and other evidentiary material of misuse of public money, government neglect, or abuse of authority in Cross-Training and Knowledge Sharing local governments. Citizen participation in this form has been Toward this end, the COA and CSOs should forge successfully implemented for elections and child welfare. collaborations with other government agencies, The rapid advancements in information and communication especially frontline and basic service providers such as the technology and citizens’ easy access to electronics should Department of Social Work and Development (DSWD), make this initiative easy to implement nationwide. the Department of Health (DOH), and the Department of Education to develop citizen participation models The COA could establish a summer internship or on-the- appropriate to their mandates. The DSWD and the DOH job (OTJ) training for graduating accounting students in currently engage extensively with CSOs for various projects, collaboration with academic institutions. State universities but the relationships have essentially been one of principal and colleges, which are funded by public money, should and implementer, each with its own standards and be preferred. The interns or trainees could be used in CPA methods. engagements as well as in other audits. A similar initiative with the two other independent The internship and OTJ training could be taken a step constitutional commissions—the Commission on Elections further into a form of pre-licensure requirement, similar to (Comelec) and the Civil Service Commission (CSC)—may an earlier Philippine government program that required also be considered, given their special mandates in (a) the medical school graduates to serve for six months in rural matters of elections and the right of suffrage and (b) the areas before they could be licensed to practice. This idea integrity and efficiency of public service. These citizen rights has been preliminarily discussed with the professional and prerogatives serve as a foundation for an effective, regulations commission. efficient, accountable, and responsive government. Engaging accounting majors and new graduates in this At present, both commissions have some form of citizen way would not only serve to expand citizen participation in engagement. The Comelec accredits a citizen arm (for public audits but also promote love of country and genuine example, the National Movement for Free Elections) public service, which are fundamental underlying values of for nationwide elections; however, this type of citizen public accountability. participation is focused on the conduct and results of elections. A continuing information drive on responsible A similar collaboration with professional organizations, such as voting could be developed using the CPA model. Similarly, the Philippine Institute of Certified Public Accountants and the the CSC could use the CPA model to better implement the Philippine Institute of Civil Engineers, should also be explored. Anti–Red Tape Act of 2007. Such an initiative would allow CSOs to officially monitor how civil servants comply with At present, the COA is authorized to deputize and retain their duty to serve the public. licensed professionals who are not in the public service as it deems necessary to assist government auditors in Conducting Performance Evaluation of the CPA specialized audit engagements.30 Before any of these proposed initiatives are carried out, however, the COA, jointly with its CSO and citizen partners, 30  State Audit Code of the Philippines, Presidential Decree No. 1445, sec- must conduct a formal performance evaluation of the tion 31, https://www.coa.gov.ph/phocadownload/userupload/Issuances/ rules-and-regulations/PD1445.pdf 26  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) CPA. Although the CPA is now in its fourth year, no such institutionalized in the many ways suggested in this report, performance evaluation has been made. the participants, advocates, and supporters can only grow and branch out in many other areas of citizen involvement. This report of the CPA outcomes largely draws from project documents on file and anecdotal accounts of the In addition, communities of practice will consequently take participants of various workshops, debriefing and reflection root and flourish. Such communities are the big vision of the sessions, and field outings. The experience has been rich, CPA—dynamic communities of citizens who are properly and a substantial body of knowledge has accumulated. informed, are equipped with sufficient knowledge and skills, Now performance indicators need to be developed, and are able to independently engage with government on management and implementation methodologies need issues affecting their everyday life. The communities will use to be properly and coherently documented, and an overall these skills to effect positive change. At the very least, the rating system needs to be established. The lessons learned CPA can result in citizen brigades in every barangay that— in phase I should likewise be appropriately incorporated without waiting for or depending on the COA’s initiative and nationwide in the CPAs under phase II. intervention—can competently and confidently undertake audits and inspections of government projects and actions in their respective localities. And these brigades could hold Building of Communities of Practice their government to account. When that happens, citizen Clearly, the CPA has proven to be an effective tool in power will truly prove to be the cornerstone and driver of engaging citizens in participating in governance, and it an open, transparent, and accountable government. opens up other forms and avenues of engagement and involvement. If its current momentum is sustained and Citizen Participatory Audits  /  27 A Phase I Citizen Participatory Audits No. of No. of CSO Citizen Subject Objectives Partners Auditors Duration Significant Findings KAMANAVA flood To determine 3 5 7 months The project has not completely mitigated and drainage if the project flooding, because of the following: system control has attained • Deficiencies in design and construction project its purpose • Existence of informal settlers and the large of mitigating volume of garbage in the site flooding • Poor operating and maintenance work • Inadequate personnel and communication facilities • Improper control and monitoring of the retention and installation of concrete pipe gates/tosangs Barangay health To assess the 3 7 5 months An overwhelming demand exists for quality services performance of primary health care that is not effectively met health services because of the following: on the basis • Extremely low ratio of doctors and nurses to of the Quality patients Standard List • Inadequate and overworked staff for Rural Health • Severe shortage of medicines Units and Health • Lack of basic equipment in good working Centers of the condition Department of • No birthing facilities Health and from • Lack of potable water supply in one center the perspective of beneficiaries 28  /  Citizen Participatory Audit in the Philippines—Pilot Phase I (2012–2014) No. of No. of CSO Citizen Subject Objectives Partners Auditors Duration Significant Findings Solid waste To assess the 5 22 6 months • Solid Waste Management Board was management compliance of the constituted, but some board members do program of city government not possess the requisite technical expertise. Quezon City with certain • Solid Waste Management Board was not provisions of implementing the program but another unit Republic Act of the city government was doing so. No. 9003a and to • Citizens find the information campaign determine the satisfactory; 75 percent practice waste extent to which segregation. a clean city has • A majority of respondents rated the city as been achieved clean. Super Typhoon Haiyan aftermath • Relief To determine the 8 100s 5 months • Low use of donor and budgeted funds operations efficiency and • Deficiencies in accounting, documentation, effectiveness of and recording receipts and disbursements the relief and • Impeded procurement of relief goods and urgent response supplies operations, • Poor management of inventory and supplies and the level of and the warehousing and delivery systems adherence to accountability requirements in the aftermath of Typhoon Haiyan • Construction To assess if the 21 5 months Audit report has yet to be released. of bunkhouses purposes, time and cash for lines, mechanics, work program and eligibility requirements of the program were being met Note: CSO = civil society organizations; KAMANAVA = a cluster of 4 urban areas in low-lying areas of Metro Manila. a. See https://www.lawphil.net/statutes/repacts/ra2001/ra_9003_2001.html