Maria Gracia M. Pulido Tan Chairperson, Commission on Audit Guest Speaker and Inducting Officer

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1 Encounters in Fighting Corruption in the Government Sector Association of Certified Fraud Examiners (ACFE) 1 st General Membership Meeting Makati Sports Club 19 March 2014 Maria Gracia M. Pulido Tan Chairperson, Commission on Audit Guest Speaker and Inducting Officer Thank you for inviting me, it is a pleasure and privilege to be with you tonight, specially as 60 of our Auditors are going to be inducted into the ACFE. All of them successfully hurdled the grueling qualifying exams in pursuit of their commitment to their profession and to the service of the Commission, and of course, the Filipino people. Thank you, ACFE, for welcoming them into your fold, and to USAID for its invaluable assistance in reviewing them for the exams. You have asked me to share my experiences in fighting corruption in the government sector. I have to say that even long before joining Government, I have been allergic to corruption. I was in tax practice for most of my professional life and I stand on record that I never paid anyone off to secure the interests of my client. I always endeavored to win on the merits, and if any client wanted me to come across, I would immediately him to get a fixer, not a lawyer. I chose to lose the client and the professional fees rather than lose my soul. In government, the fight against corruption is waged on at least two fronts, within and without. I have been in both battlefronts and saw the many insidious ways that corruption is carried out, in all levels. As Undersecretary of the Department of Finance for Revenue Operations, I had oversight of the Bureau of Internal Revenue, the Bureau of Customs, and the One Stop Tax and Duty Drawback Center, so you can imagine the battles I have had to fight. I count myself privileged, because my heads of office then as well as my head of office at the PCGG, the late Haydee Yorac were incorrigibly allergic to corruption, and they steadfastly supported me in all my initiatives. Now that I am head of office myself, and the buck stops with me, I have a ringside view. The battlefronts are still the same, within and without, and I am still allergic to corruption and the corrupt, even more so. From Day 1 and I have been on the job for 2 years and 11 months and one day exactly today I have drawn on every authority and resources granted to the Commission to address it, and relentlessly vilified by those whom we have found accountable or otherwise involved or threatened by our actions and findings. Never have I called so much on God for guidance, strength, and protection, specially for our field auditors who are particularly vulnerable to physical harm and other retaliatory action. In all, the only reward has been psychic, the supremely edifying expression of public support,

2 and a tangible sense of fulfillment that the Commission is serving the people faithfully and well. Within the Commission, we have had to clean our ranks, and continuously do so. This is not to say that the Commission is a nest of bad eggs, but like any other institution, we have our fair share. Recall that when I was appointed in April of 2011, corruption in the military was hogging the headlines where some of our auditors were implicated, and I did not quite know how much of it I would actually find once in office. All I knew was that corruption, big or small, should have no place in the COA. As a supreme audit institution constitutionally mandated to be the watchdog of public funds and spending, it has to be, like Caesar s wife, beyond reproach. Its credibility must not be compromised and securing public trust must be its overriding, everyday goal. It must lead by example to be effective. And the place to start is our very own yard, not the neighbor s. My main strategy was to address the pockets and elements of corruption that are within my area of influence and authority as Chairperson of the Commission to change. I emphasize this because early on in my personal and professional life, I learned that to effect change, we have to focus and rely on our spheres of influence, not on someone else s; we cannot control the behavior of others but we can certainly control ours. In my case, my spheres of influence are only myself and the authorities granted by law and regulations to my position; these are my only tools to battle the elements of, or contributory factors to, corruption within the Commission. And from my first day in office, I meant to use them decisively and consistently. Thus, one of the four main thrusts of my administration is instilling integrity as a way of life in the Commission. Integrity is not simply honesty, which is merely telling the truth to ourselves and others; integrity is living that truth. I have had a considerable number of initiatives in this area, and I could write a book on them, but allow me to share with you tonight the real game changers, as it were. The first item in my agenda was the culture of patronage, which I believe is the biggest single corruption factor in the bureaucracy. This is the tayo-tayo culture, the padrino system, of which we are all too familiar. It is manifested in many variations, sometimes in a very direct manner, often in very subtle ways. Think telephone calls and letters of recommendations from politicians. Think courtesy calls with no concrete agenda, other than to establish connections or mutualities, like common friends and relatives, native origin, language or dialect, church, school, organizations and the like. Think of alalays and inner circles, cliques and turfs. In themselves, they ought to be harmless, mere slices of everyday life and social engagement. But in the bureaucracy, these have been harnessed and refined into an art or habit, to either advance and promote oneself, or to send a strong message to the new kid on the block that hey, here is a force that I have to reckon or play along with to make my life easier and perhaps, even lucrative. So what did I do? Almost instinctively, I replied to every endorser politician or not that I would act in the best interest of the service and based on merit alone. I told every employee who came to me with an endorsement that if he or she truly believed that he or she should be hired or

3 promoted, he or she did not need any such endorsement. I told them that none of the endorsers outside of the Commission truly knew their merits or demerits; only the Commission did. And I announced this conviction on several occasions to our workforce, encouraging them to instead rely only on and project their respective merits, warning them that I would consider an endorsement to be a demerit. Yong mga nagpapa-assign sa kung saan-saang ahensya through padrinos, isa lang ang aking tanong, bakit? And mind you, I have a mental list of auditors who are favorites and most sought after. In time, na-gets din nila ang message, and endorsements quickly dwindled. Matagal tagal na rin akong hindi nakakita ng sulat o nakakatanggap ng tawag. Corollarily, I pushed for the establishment of an open and merit-based hiring and promotion system. Anyone interested can and must directly apply with HR. For promotions, hindi na kailangan ang recommendation ng superior nila. Also, I refused to be bound by the performance evaluations because early on, I found that there was really no honest-to-goodness and objective evaluation being done: invariably, the employee rated himself or herself and simply asked the superior to sign. Lima singko ang 90+ at nagkalat ang Outstanding. Kung good ka sa superior, okay, pirma; kung hindi, wait for the next round, or for the weather to change. Irrelevant halos ang merit, talamak ang palakasan. So we developed a new performance evaluation system where the standards are expressly set forth and the rater is required to discuss them with the ratee at the start of the evaluation period as well as immediately after the rating is made. If the ratee disagrees with any item, he or she must write it down on the same form. So kwentas klaras, transparent, and documented. We will be launching it shortly and hopefully, it will institutionalize meritocracy in the Commission. I also took all efforts to get to know our people and their performance records. With more than 8,000 of them, this has definitely not been easy. But I got a lot of help from unimpeachable contacts within the agencies, some intelligence work, and even from within the ranks. There were also anonymous reports from the public which, upon verification, yielded positive. Thus, I was able to identify the more notorious ones early on they leave a trace or smell somehow, you know and re-assigned them to less delicate posts. Soon, I was receiving requests for early retirement, which I gladly accepted. I have since been effecting periodic re-assignments, taking into account every validated information relating to relationships (e.g., relatives being re-assigned apart), attitudes and behavior, competence, performance, and leadership qualities, or the lack of it. This exercise led me to also discover silent but very competent, untainted and dedicated workers, many of whom are now in managerial positions and doing very well. I hope they will pay forward, by carrying on what little we have started, and inspire their colleagues by their example. In respect of administrative investigations, we established an Integrity Office under my Office solely dedicated to such investigations. Before, these were lumped with Fraud Audit, resulting in long delays which were not only violative of the right of concerned employees to the speedy disposition of complaints against them, but also fostered the culture of impunity. For the culpable, the longer the disposition of his case, the merrier; for the innocent, prolonged agony. It was not fair, so that system had to go. And as far as the imposition of disciplinary action is concerned, consistency is a must, flip flopping decisions

4 are to be avoided. Enforcement is swift and decisive, even if suspensions or dismissals will mean a disruption in team work. For the Commission on Audit to effectively exact accountability from government, we have to be willing and resolute in exacting accountability from our own ranks. If you will note, all the foregoing initiatives and measures are commonsensical, pragmatic and well within the authorities granted to the Commission by law and regulations. Nothing innovative or creative. Reshuffling of personnel is expressly authorized nay, required under PD 1445, the Government Auditing Code of the Philippines. The institution of meritocracy in the civil service is a constitutional policy and mandate. As a fiscally autonomous and constitutionally independent commission, we are authorized to create offices in the exigency of the service. All we did was to to use these authorities. What was perhaps radical was my decisiveness and steely resolve to carry them out, without fear or favor, and to the utmost limitations of my human frailties, consistently and judiciously as well. I did not allow politics to get in the way; on the contrary, I exercised strength and political will. I did not aspire to be likeable and popular as a benevolent and kind leader; I administered with tough love instead, in much the same way as I relate with my children, brothers, sisters, and yes, even with my husband. Was it, or has it been, easy? Frankly, I never thought of it any other way. It s just me, ang babaing isinilang na mataray. Seriously, I credit the steely nerves to my natural character and temperament, and my ability to stand my ground to my training and experiences as a practicing lawyer for more than 30 years. Also, I have always been a straight talker, independent-minded and determined, used to taking charge and making judgment calls in a snap. The fact that I did not seek the position but accepted it nonetheless after an intense period of discernment for no other reason than to do a job, and do it to the best of my abilities - not to implant myself, wield power, and luxuriate in the perks that go with it also gives me a sense of temporalness and detachment. I am always energized by the spiritual song Pag-Aalay ng Puso, that I am only passing through, and will pass this way but once, so whatever good I can do, I will do it now. But I would say that my one and only real strength is my strong faith in and dependence on God. I am constantly seeking His guidance and grace, and putting everything at His disposal, including myself. He is in every decision I make, through constant prayer and submission to His will. Wala akong maipagmamalaking iba, I take my boast only in God. After all, I took the position on the conviction, after an intense process of prayer and discernment, that this is where He wants me to be at this time of my life and this is the work He wants me to do for Him. Kaakibat nito ang paniniwalang ibibigay niya lahat ang kakailanganin ko upang magampanan ang tungkuling ito ayon sa kanyang kalooban. Kaya naman, sa dinami-dami ng mga white paper, pintas at batikos, at kung ano pang mga pagkilos to undermine my office and authority, or cast aspersions on my person, hindi po ako natitinag at patuloy akong naninindigan. The Lord gives me peace of mind and serenity of spirit, for which I am extremely grateful. This is my antidote to this toxic, pressure-filled job.

5 And so it is in the battlefronts outside of COA, in the agencies which we audit, and among those who are exposed or threatened by our work. Of course, I get calls, some of them nasty and threatening. I have been called to meetings with the high and mighty. I have been put to task in the august chambers of Congress, specially during Budget hearings; vilified in the media with relentless attacks on my person and even my family. The Commission s credibility has been put in question on several occasions. Our PDAF report takes the cake, as you very well know. You are also aware of how we or I, in particular have dealt with all these. No ifs, no buts, katotohanan lamang. Indeed, by the very nature of our work and the focus of our audit, we are fair game, and I, as head of agency, even more so. Natutumbok talaga ang mga matataas at makapangyarihan sa pamahalaan. That is why I am very particular with methodologies, the quality of work and audit evidence. I make it a point to be hands-on, to know the issues and actions taken on the ground, review outputs and audit evidence as far as my time and stamina will allow me. The PDAF report, I personally reviewed that even if I did not have to. Time and again, I tell our personnel that I will stand by them for as long as they perform faithfully and well, and will defend their work to the best of my abilities. This to me is what leadership is all about servanthood, not rulership; working harder and more than any personnel in the Commission, and leading by example. These are our most potent weapons against corruption: quality work produced through utmost compliance with the standards of our profession, integrity as a way of everyday life, and dependence on God s mercy and providence. As it is said, the legacy we leave is the one we live. So again, I ask the question: Has it been easy? Has it been worth it? Fraud audit, or any other audit for that matter, is really just a piece of forensic work. There are rules of procedure and audit standards to follow, tools and techniques to uncover anomalies. For as long as our auditors abide by these, are resourceful in gathering evidence, meticulously sift through the documents and transactions, and analytically evaluate the information they gather, their output will be credible and make a tight case. In other words, professionalism and technical competence are usually thought of as the core of effective and credible audits. With their training specially as Certified Fraud Auditors, I am confident that they are up to the challenge. But they need to be also morally, psychologically and spiritually fit for the job and for all the dangers it can bring. Only recently, one of our senior auditors in Zamboanga City was shot and killed, and the NBI investigation report concluded that it was job-related. Nagbuwis ng buhay para sa bayan. My first instinct was to reach out to her bereaved family and calm the ranks. But how? What could I say or do, in the face of such a cruel tragedy and loss? How could I drive away the fear and shock? I prayed hard for guidance, and there was only one way: to be honest, to be true. We grieve the loss, we commend her sacrifice, and acknowledge that yes, this is the hazard of our work but as true professionals and public servants, we must be prepared to give what it takes to be faithful to duty. Alongside, I took every measure to bring the perpetrators to light, and I am deeply grateful for the swift action of the NBI through Justice Secretary Leila de Lima. It also brought to fore the need to immediately and

6 comprehensively address the security requirements and concerns of our personnel and as we speak, we are in the thick of mapping a security plan for immediate implementation. Mahirap magsilbi sa bayan ng tapat. I have had to give up a lot of personal leisure and comfort, including quality time with my family. I have to work until the wee hours of morning on most days on never-ending paper work which I bring home. As a practicing lawyer, sanay naman ako sa ganito, but I have never worked so hard in my life for so little pay. Sa awa ng Diyos, hindi naman ako nagkakasakit, except for occasional colds and bum stomach. But what is most difficult is the invasion of privacy, the loss of anonymity. Some think I love the limelight and celebrity status, and that perhaps I am preparing to run for public office. Not at all, I am just doing a job that happens to be imbued with so much public interest and it devolves upon me, as head of agency, to speak for COA and its work. I do not delegate this to subordinates unless for compelling reasons, because the people deserve authoritative information. I have been rewarded with what I believe has become a more credible and trustworthy COA, a corps of highly competent and dedicated workforce, and an emerging new blood of future leaders who seriously live out public service for what is truly it a public trust. Of course, meron pa ring mga pasaway and are perhaps so eagerly looking forward to the end of my term in less than eleven months for happy days to come again. The choice depends really on those who have tread the narrow path with me and will remain with the Commission long after my term. Will they allow the hard-earned reforms to wither, or will they carry on steadfastly and resolutely as we have done together in the past three years? Whatever path they will choose to take, I hope that they will remember this time, when they saw for themselves it can be done, and it can be done again and again, and that no force anathema to good governance, integrity and independence can succeed without their consent. To them and to all of you, I offer this familiar prayer of Jabez: "Oh, that God would bless you and enlarge your territory! Let His hand be with you, and keep you from harm so that you will be free from pain." Again, thank you and good evening.

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