Philippines sugar regulator faces audit flags over equipment distribution and fund controls

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Sugar regulator faces audit flags

Highlights

Sugar Regulatory Administration distributed P212.79 million in machinery without deeds of donation, creating gaps in documentation for ownership and obligations.
Commission on Audit flagged P3.55 million worth of underutilized equipment due to specification mismatches and identified P10.76 million in unliquidated fund transfers as of Dec. 31, 2025.
Despite P53.26 million in unsettled audit disallowances and unaddressed recommendations, auditors gave an unmodified opinion on 2025 financial statements showing P3.94 billion in assets and P1.52 billion in expenses.

Audit findings on equipment, transfers and assets

As reported by BusinessWorld, citing the Commission on Audit, the Sugar Regulatory Administration distributed P212.79 million worth of machinery under its Block Farm and Non-Project Grant Aid programs without executing deeds of donation, leaving ownership transfers and the obligations of the agency and recipients inadequately documented.

State auditors also say several farm machineries and implements worth P3.55 million are either underutilized or not used at all because their specifications do not match farm topography, soil conditions or tractor capacity. The mismatch limits the programs' ability to raise productivity and support sugarcane farmers through government-funded equipment.

Auditors urge the agency to assess farm conditions and beneficiary requirements before procuring machinery so equipment is suited to its intended use. CoA also identifies P10.76 million in unliquidated fund transfers as of Dec. 31, 2025, including P5.26 million released to National Government and implementing agencies and P5.5 million transferred to nongovernmental and civil society organizations.

In addition, the audit notes P47.46 million worth of unserviceable property, plant and equipment that has yet to be disposed of. Those assets carry a net book value of P2.72 million and face further deterioration that could erode salvage value.

Financial statement opinion and compliance gaps

The audit summary shows P53.26 million in unsettled audit disallowances covered by 23 notices, along with P1.33 million in unsettled suspensions. CoA also says the agency fails to implement 14 of 28 audit recommendations issued in previous years, while 13 are fully implemented and one is closed.

Despite the control and compliance issues, auditors issue an unmodified opinion on the fair presentation of the SRA's 2025 financial statements. The agency reports total assets of P3.94 billion and expenses of P1.52 billion in 2025, against a corporate operating budget of P2.61 billion.

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