MANILA — The Commission on Audit (CoA), the constitutional body that audits the books of government agencies each year, has flagged the Sugar Regulatory Administration (SRA) over P212.79 million worth of farm equipment distributed without proper ownership transfer documents, in an annual audit that also cited idle machinery, unliquidated fund transfers and unimplemented recommendations.

In the agency's 2025 audit report, state auditors found that machinery and implements granted to sugarcane beneficiaries under the SRA's Block Farm and Non-Project Grant Aid programs, aggregating P3.55 million, went underutilized or entirely unused.

"Several farm machineries and implements granted to sugarcane beneficiaries under the Block Farm and Non-Project Grant Aid programs, aggregating P3.55 million, were either underutilized or not utilized at all due to incompatibility with farm topography, soil type or tractor capacity, resulting in nonattainment of the programs' objectives," the auditors said.

According to the Commission, equipment specifications did not match conditions in beneficiary farms, preventing the programs from fully meeting their objective of improving productivity and supporting sugarcane farmers through government-funded equipment. The finding bears on the SRA's core mandate: the agency implements the Sugar Industry Development Act of 2015, which provides for government-funded support, including machinery, to raise the productivity of sugarcane farms. Auditors urged the SRA to assess farm conditions and beneficiary requirements before procuring machinery, to ensure the equipment is suited to its intended use.

In a separate finding, the audit body said the SRA distributed P212.79 million worth of machinery without executing deeds of donation, leaving ownership transfers and the responsibilities of both the agency and the recipients inadequately documented. Under government property rules, deeds of donation are the documents that formally transfer title and establish accountability for an asset's use, upkeep and monitoring — the trail auditors found missing for the distributed machinery.

CoA also cited P10.76 million in unliquidated fund transfers as of Dec. 31, 2025, consisting of P5.26 million released to National Government agencies and implementing agencies, and P5.5 million transferred to nongovernment and civil society organizations. Liquidation — the submission of reports and supporting documents showing how transferred funds were used — is a standing CoA requirement that allows auditors to verify the utilization of public funds; until it is completed, the amounts remain unresolved on the agency's accountabilities.

"The funds transferred/released to National Government agencies/implementing agencies and nongovernmental organizations/civil society organizations in the amounts of P5.26 million and P5.5 million, respectively, remained unliquidated as of Dec. 31, 2025," auditors said.

The report additionally noted P47.46 million worth of unserviceable property, plant and equipment that had yet to be disposed of. The assets carried a net book value of P2.72 million and were at risk of further deterioration, potentially reducing their salvage value.

The audit summary showed P53.26 million in unsettled audit disallowances covered by 23 notices, along with P1.33 million in unsettled suspensions. Under CoA rules, a disallowance covers irregular or improper expenditures that accountable officers must settle or refund, while a suspension is a provisional charge that can be lifted once the expenditure is justified.

CoA said the agency had failed to implement 14 of 28 audit recommendations issued in previous years. Thirteen recommendations were fully implemented, while one was closed.

Despite the findings, the audit body issued an unmodified opinion on the fairness of the presentation of the SRA's 2025 financial statements — meaning the auditors concluded the statements fairly present the agency's finances, with the observations raised as separate management and compliance concerns.

The SRA reported total assets of P3.94 billion and expenses of P1.52 billion in 2025 against a corporate operating budget of P2.61 billion.

CoA carries unimplemented recommendations across annual audits and agencies are expected to act on its directives, so the items to watch are whether the SRA executes the missing deeds of donation, completes the liquidation of the P10.76 million in transfers, disposes of the unserviceable assets, and settles the outstanding disallowances — with progress to be measured in the agency's next audit report.

— Pexcel John Bacon