The 2020 COA Annual Audit Reports:

Panganiban bought dump trucks, MPV in midst of COVID pandemic

The Commission on Audit (COA) has flagged the Panganiban municipal government’s purchase of two dump trucks and a multi-purpose vehicle in 2020 charged to the disaster response fund while the town was in a state of calamity due to the COVID-19 pandemic.

According to the audit report for the local government covering transactions for said year, the LGU procured two units of six-wheeler mini dump truck worth P1.6 million each and one unit four-wheeler multi-purpose vehicle at P1.5 million, for a total of P4.7 million, sometime in September 2020.

Payment for one of the mini dump trucks as well as the MPV was taken from the Local Disaster Risk Reduction and Management Fund (LDRRMF) in a one-time procurement during the period the country was already under a state of calamity due to the coronavirus pandemic.

The audit team found out that the procurement of one mini-dump truck was charged against the unexpended balances of the Quick Response Fund (QRF) of previous years which were transferred as special trust funds.

This was “contrary and inconsistent” with applicable law and regulations, the COA stated, as it was not a critical, urgent, and appropriate action to address the disaster response requirements of the COVID-19 emergency as intended by Local Budget Circular No. 124 and Presidential Proclamation Nos. 929 and 1021.

Said laws and regulations specified that unexpended LDRRMF balances that accrued to the special trust fund may be used to address the COVID-19 emergency, with LGUs enjoined to undertake appropriate disaster response aid and measures to curtail and eliminate the threat.

The audit team pointed out that the procurement was not a project or activity of disaster response classified under NDRRMF-DBM-DILG Joint Memorandum Circular No. 2013-1.

It discovered that the Sangguniang Bayan Resolution No. 39-19 had approved the utilization of the previous years’ unexpended QRF, on the basis of Municipal DRRM Council Resolution No. 02-19 authorizing the utilization of P1.97 million for the purchase of dengue prevention equipment and the six-wheeler dump truck.

Issued at the time the province was under a state of calamity due to increasing dengue cases, the MDRRMC resolution did not mention what fund to use for the purchase and only approved the identified equipment and its immediate purchase, the team stated.

The purchase of the second six-wheeler mini dump truck, the COA noted, almost depleted the LDRRMF which should been reserved and made readily available to fund urgent needs during the pandemic.

The action of the LGU, it stressed, defied Section 4(w) of Republic Act 11469, or the Bayanihan To Heal As One Act, which mandated that any unutilized or unreleased balance in a special purpose fund shall be utilized to address the COVID-19 situation.

Despite the MDRRMC’s bid for the immediate purchase of the dump truck for dengue eradication operation, it took almost eight months before the LGU started the procurement process, with the equipment delivered in September.

“Thus, due to the time lapsed, it appeared that there was no urgency to acquire additional unit of six-wheeler mini dump truck for dengue eradication operation,” the government watchdog underscored.

In another significant finding, the COA said the LGU did not allocated its Bayanihan Grant to Cities and Municipalities (BGCM) fund of P5.74 million to a specific program, project and activity, with the full amount programmed to only one item identified as “Maintenance and Other Operating Expenses.”

On the other hand, the disbursements to the said “MOOE” fund lacked supporting documents while some expenses were not allowable COVID-19-related PPAs to be funded by BGCM.

“Disbursements totaling P5.71 million were not supported with complete documentation,” the audit team said, with the vouchers lacking the list of recipients and acknowledgement of the receipt of relief goods.

Among the emergency purchase disbursements that lacked Mayor’s Permit, Income Tax Returns and Omnibus Sworn Statements of the suppliers were P4.3 million for 1,400 sacks of commercial rice, 500 cases of assorted canned tuna and 240 cases of sardines from ACC Hypermart Corp.; P583,960.00 for goods, hygiene kits, medicines and supplies for isolation facilities from Mr. A ALL-IN Marketing; and, P774,538.00 for PPEs, medical equipment and supplies from Star Max Grocer Marketing, Inc.

Another P36,039 were spent for the purchase of seeds and fertilizers and for traveling expenses, which are considered ineligible BGCM expenses, the report said.

There was no proof that the price negotiation for the rice and canned goods was conducted in accordance with Item 5 of GPPB Circular No. 01-2020, it added.

Meanwhile, the same audit also found out that the distribution of the Social Amelioration Program (SAP) funds totaling P6.03 million was attended by violations, including the lack of supporting documents and payment of the P5,000 benefit to ineligible beneficiaries.

The COA said that the originals of the Cash Assistance Payrolls covering 1,206 beneficiaries were missing, with only photocopies available, with the latter showing deficiencies including the lack of photos of the beneficiaries during the actual receipt.

Ineligible beneficiaries had received the cash assistance, including 23 families with members who were either job order personnel, barangay officials, day care workers, teachers and others, it added, while eight families had members who were employed in the private sector.

One family has a member who is a pensioner while another family had a member who is a resort owner, the COA pointed out.

Nineteen beneficiaries did not attach photocopies of valid IDs while 123 signatures in the payrolls appeared to be not the same as that in the cards and IDs, it said.

Among the other significant findings of the audit included: the P200,000 intended for the Waste Management Program utilized instead as financial assistance to barangays Maculiw, Babaguan, Burabod, Sto. Santiago and Cabuyoan at P40,000 each; and, unnecessary hiring of a large number of job order personnel ranging from 56 to 108 a month that cost the LGU P5.44 million, including a one-time hazard pay.

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