NEA pulls out of BUSECO audit requested by Gov Zubiri

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The seven-man audit team from the National Electrification Administration (NEA) tasked to look into the books of the Bukidnon Second Electric Cooperative, Inc. (BUSECO) has called off the examination.

The NEA audit team led by Mr. Rodel Gipulan flew to Manolo Fortich, Bukidnon on September 19, 2017 to conduct a comprehensive audit of Buseco’s books of accounts and other relevant financial records upon the request of Bukidnon Governor Jose Ma. Zubiri, Jr.

Gipulan said the audit team, during their meeting with Buseco’s finance and legal officers, as well as members of the Buseco Employees and Labor Union (BELU) on September 19, was made to sign an audit agreement containing certain “conditionalities.” At first, the team was hesitant to sign the agreement but decided to sign it for the purpose of getting information on certain financial and operational data.

The conditions included in the agreement were the following:

– requiring request form before all needed documents can be furnished for the audit team;
– all interviews with Buseco personnel shall be recorded;
– working area will be monitored through a close circuit television (CCTV);
– and the audit will be subject to the approval of the Buseco Board of Directors.

Gipulan also said they were informed by the NEA lawyers, on the following day (September 20), that the entire BUSECO Board of Directors was placed under preventive suspension for a period of 30 days by the NEA Board of Administrators (BOA).

“In view of the information from NEA on the suspension of the entire Buseco Board, we decided to leave Manolo Fortich in the afternoon of September 21,” he said, adding that “the move was prompted by our realization that we would be in effect rendering nugatory the decision of the NEA Board to suspend the Buseco Board of Directors.”

Gipulan said they will proceed with the audit once the NEA management team is fully functioning.

READ: BUSECO officials suspended

To recall, NEA Administrator Edgardo Masongsong issued an office order last May creating a team to oversee the management of Buseco due to internal conflict among its BOD members, allegations of irregularities, and to ensure its continued operational and financial viability.

The order was pursuant to Sections 4 and 4-A of Presidential Decree No. 269, as amended by Republic Act No. 10531, stipulating the supervisory powers of the NEA over the ECs.

Meanwhile, NEA Deputy Administrator Goldelio Rivera said: “NEA sent an audit team as a favorable response to the request of Gov. Zubiri, in our mutual desire to address the problems besetting Buseco, but the coop itself in utter defiance to the NEA’s inherent supervisory mandate over all electric cooperatives imposed coercive and unreasonable restrictions with no other objective but to impair the fairness and reliability of the audit report.”

“The restrictions, particularly that on recording interviews with Buseco personnel, is simply against auditing principles. No independent audit can be done under those conditions,” he added.

The NEA Deputy Administrator, who is a certified public accountant, also condemned the unreasonable and restrictive condition of subjecting the audit for the approval of the suspended Buseco Board as it “reeks of bad faith, tantamount to a whitewash, and the results of which can only be unreliable.”

“Due to the continuing defiance and coercive restrictions imposed upon the NEA team, the Buseco Board has ensured that no credible audit report will result if such conditions were followed. Such ostensible compliance with the required audit is more apparent than real,” stressed Atty. Rivera.

In an order dated September 5, the NEA Board placed the BUSECO directors under a 30-day preventive suspension effective immediately to prevent undue influence on the motu-proprio investigation being conducted by the NEA Administrative Committee into their continued defiance to heed the several directives issued by the electrification agency.

In issuing the suspension order, the NEA Board cited two resolutions passed by the Buseco directors, namely: Board Resolution No. 17-05-12, strongly opposing and disallowing the office order issued by the NEA to intervene and/or takeover the management of Buseco; and Board Resolution No. 17-05-16, enforcing the regularization of Mr. Deiter Hoff Arellano as regular general manager.

Arellano was removed as officer-in-charge (OIC) of Buseco by the NEA Board in an order dated June 22, 2017 after being found guilty of grave misconduct, dishonesty and conduct prejudicial to the best interest of the electric cooperative (EC) and member-consumer-owners (MCOs). [from NEA’s official Facebook page –]

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