The National Tobacco Administration (NTA) failed to impose and collect P566.477 million in regulatory monitoring fees from tobacco importers, exporters, and transshippers over a four-year period, according to the Commission on Audit (CoA). Because the fees were never imposed in the first place, the amounts never entered the agency's accounting records.

In its 2025 audit report, CoA said the agency's failure to impose the fees from 2022 to 2025 resulted in revenue underassessments of P137.461 million in 2022, P124.474 million in 2023, P139.242 million in 2024, and P165.300 million in 2025.

"The Monitoring fees, Accumulated surplus, and Accounts receivables accounts were understated by P165.300 million, P401.177 million, and P566.477 million, respectively, due to the under recognition of revenue arising from non-imposition of monitoring fees on tobacco importers, exporters, and transshippers," the commission said.

Auditors noted that the agency's failure to recognize the revenue ran contrary to the provisions of the International Public Sector Accounting Standards governing revenue recognition and the presentation of financial statements. Those standards are the internationally recognized rules for how public-sector entities record income and present their books, which is why fees that were never assessed surfaced as understated revenue, surplus, and receivables.

CoA directed the NTA's Regulation Department to coordinate with its legal counsel to establish the legal basis for exempting certain tobacco companies from paying monitoring fees. Failing that, the agency should compute and collect the appropriate charges to avoid the issuance of a Notice of Charge, the instrument state auditors use to assign accountability for uncollected government dues.

In a separate finding, state auditors questioned the propriety and regularity of P54.586 million in cash assistance distributed under the NTA's Tobacco Farmers' Production Grant covering crop years 2023-2024, 2024-2025, and 2025-2026.

The grant program provides P6,000 to each qualified tobacco farmer through the agency's provincial branch offices in Cagayan and Isabela, as well as its Mindanao Satellite Office.

However, CoA said it could not establish whether the beneficiaries met the program's eligibility requirements, citing missing registration documents, landholding violations, discrepancies in identification records, and the absence of approved beneficiary lists.

In Mindanao, 550 recipients who collectively received P3.3 million had no proof that they were registered tobacco farmers. In Cagayan, another 613 beneficiaries who received P3.678 million lacked documents showing that they were tilling land or had market tie-ups.

The NTA also failed to submit approved beneficiary lists covering 2,300 recipients worth P13.8 million and another 1,666 recipients worth P9.996 million in Mindanao. In Cagayan, P2.208 million — equivalent to 37.51% of the grant funds — remained unused after 368 prequalified farmers were subsequently found ineligible.

CoA urged the agency to immediately update its Farmers Masterlist Information System and establish regular validation procedures to ensure that its records accurately reflect eligible tobacco farmers. Both findings rest on the same weakness: the agency could not document who owed the fees or who qualified for the grants.

The commission likewise rendered a qualified opinion on the NTA's 2025 financial statements, which cover the agency's financial position and operations for the year. A qualified opinion means auditors concluded the statements were fairly presented except for specific matters requiring correction. As of Dec. 31, 2025, the NTA also carried P26.674 million in unsettled audit disallowances and had yet to implement 12 of 20 audit recommendations from previous years. The signals to watch next are procedural: whether the NTA establishes the legal basis for the exemptions or computes and collects the fees, updates its farmer registry, and moves on the outstanding audit recommendations. — Pexcel John Mackenzie