The government lost about P10 billion last year due to the failure of the Philippine Charity Sweepstakes Office (PCSO) to collect remittances from operators of the Small Town Lottery (STL), the Commission on Audit (COA) said in a report.

The PCSO allowed 71 STL operators across the country to remit to the government less than what they had promised monthly, the COA said in its audit report on the PCSO for last year, which was made public on Thursday.

The PCSO did not impose sanctions against erring agent corporations despite their violations of STL rules, resulting in losses to the government, the audit body said.

Suspension, cancellation

“It has been observed that the said penal provisions were not implemented by the concerned department/officials considering that majority of the noncompliant AACs (authorized agent corporations) have been incurring shortfalls in their PMRRs (presumed monthly retail receipts) for several months already but none was subjected to any of the above-stated sanctions,” it said.

Antidote to ‘jueteng’

The PCSO is a government-owned and -controlled corporation tasked to raise and provide funds for charities through various lottery and gaming schemes.

One of its main products, the STL, has been touted as a government antidote to the “jueteng” numbers racket. STL, however, has also been widely suspected to serve as a cover for jueteng.

Mandated to remit

Under the PCSO rules, the AACs, or the designated STL operators, are mandated to remit their PMRR. If they failed to do so, they could be suspended or their licenses canceled.

The COA urged the PCSO to strictly impose the penalties “to ensure timely and accurate remittances of the amount due.”

PCSO spokesperson Florante Solmerin declined to give any comment, saying General Manager Alexander Balutan had yet to discuss the COA report with the PCSO’s board of directors.

The report recommended the immediate collection of the remittance shortfalls amounting to P4.049 billion from the concerned AACs.

The PCSO also incurred losses of P4.3 billion from the online Keno gaming operations due to excessive payouts.

Probe Keno also

The PCSO must probe the Keno operations because they continued to incur deficits, and find new ways to stop their losses, the COA said.

The audit body also questioned why the PCSO granted 30 of its 85 AACs the authority to operate despite their failure to fully pay the cash bond requirement for their STL franchise.

Of the 30, 19 have a total outstanding balance of P294.5 million.

On a separate issue, the COA said it issued an “adverse finding” on the PCSO due to what it said were numerous discrepancies and bloated figures in the agency’s accounts.

It said it found as many as 134 accounts amounting to P22.3 billion that were “grossly misstated.” Also grossly misstated were the agency’s “cash and cash equivalents” totaling P10.3 billion, it added.