Can an entity that receives government support of one kind or another be characterized as an entity that should not be audited by COA (Commission on Audit)?
This is the issue that has been raised by the Executive Committee (Excom) of the Metro Manila Film Festival in its response to the demand of one of MMFF’s legally designated beneficiaries, the Film Academy of the Philippines, for a “full accounting of MMFF funds in the last ten years.” MMFF’s other designated beneficiaries are the Movie Workers Welfare Foundation (Mowelfund) with a share of fifty percent of MMFF proceeds, the Motion Picture Anti-Film Piracy Council, with a share of 20 percent, Film Development Council of the Philippines (5 percent) and Optical Media Board (5 percent). The 20-percent balance is FAP’s share.
MMFF’s Execom told the January 11, 2016 hearing of the House of Representatives amusements committee that MMFF is a “private entity” and therefore is exempt from CoA auditing. It was not established as, and is not, a government entity, Execom’s spokesman told the Representatives.
It is clear that MMFF’s leadership believes that CoA’s constitutional mandate covers only institutions and entities created by law or otherwise characterizeable as government entities. This is an erroneous understanding of the function and mandate of CoA.
If MMFF has the benefit of advice from lawyers well-versed in Constitutional law, they will—and should—be informed that the object and focus of CoA attention is not institutions but public funds. If public funds are involved in any undertaking, CoA will follow the documentary trail and determine whether the funds have been used properly and for the declared purpose. It matters not to CoA that an institution is not a government entity; if the institution avails of public funds of one kind or another, CoA will conduct an audit of the use of the funds.
And how did public funds figure in the staging of MMFF? Through the amusement tax, which should have been paid by the MMFF exhibitors but were not collected by the Metro Manila governments within whose jurisdictions the films chosen for exhibition were shown. In effect, the Metro Manila government’s non-collection of the amusement tax—on a total 2015 MIFF take exceeding P1 billion the tax proceeds would have been enormous—was their financial contribution to the festival. And any outlay of public funds, by donation or otherwise, is properly auditable by CoA.
MMFF’s leadership must realize that there is a public-image aspect to a refusal to have funds audited by CoA. I like to believe that, with individuals like Boots Anson-Rodrigo in its Board of Trustees, MMFF has done nothing wrong and has nothing to hide. But a refusal to be audited by government, to which MMFF owes its existence, sends a very strong message of a very wrong kind.
In the end, this is still a case of CoA’s being mandated to audit all uses—repeat, uses—of government funds. MMFF may be a private entity, but the foregone amusement tax collections are governmental in character. They are imbued with public interest.
My unsolicited advice to the MMFF folk: Drop that private-entity nonsense and submit MMFF funds to a CoA audit with no further ifs and buts. Do not dissipate whatever goodwill MMFF still enjoys among Metro Manila moviegoers who for one entire week are allowed to see only Filipino movies.