2020 COA Audit Reports:

P11.81-M supply contracts in Pandan not compliant with GPPB guidelines

Eight contracts for the supply of goods during the Enhanced Community Quarantine in 2020 were paid by the Pandan municipal government despite non-compliance with mandatory procurement requirements, the Commission on Audit (COA) reported recently.

In its Annual Audit Report on 2020 transactions of the LGU, the audit team disclosed that the contracts were awarded by the LGU to suppliers despite their inability to submit the required documents pursuant to Government Procurement Policy Board (GPPB) Circular No. 01-2020.

Records showed that the LGU adopted the alternative method of negotiated procurement in the purchase of COVID-19 –related programs, projects and activities, with the mayor issuing an office order delegating to the General Services Officer-designate the authority to directly negotiate with legally, technically and financially capable supplier and to recommend to the mayor the award of the contracts.

On March 23 and 24, 2020, the Pandan LGU issued a purchase request covering 5,000 pieces of whole dressed chicken and 500 boxes of canned sardines at a cost of P1 million and P1.125 million, respectively. The supplier of the chicken did not submit his income tax returns and Omnibus Sworn Statement while the canned goods supplier’s statement was notarized after the payment was made.

On April 13-15, 2020, the LGU also issued PRS for the purchase of 3,000 bags of well-milled rice for its food augmentation program from a supplier, who was paid a total of P6,840,000.00, charged to the Bayanihan Grand to Cities and Municipalities (BGCM) and the Local Disaster Risk Reduction and Management Fund (LDRRMF). The supplier did not submit an Omnibus Sworn Statement.

Another PR was also issued on April 16 for the procurement of PPEs and other supplies for COVID-19 for P734,725.00 from a supplier, who did not submit a copy of his Income Tax Returns. The audit team also noted that the name and address of the sole proprietor on the Omnibus Sworn Statement were altered.

Another P1,508,584.00 worth of relief goods consisting of various groceries were also procured, with the supplier lacking the required statement.

Rapid test kits for COVID-19 valued at P600,000.00 were also procured in May 2020 and paid despite the fact that the supplier lacked the two vital documents.

“Further verification of documents also disclosed that there were direct negotiations conducted by LGU officials not authorized by the LCE,” the report stated, with the GSO-designate confirming that the assistant municipal treasurer and end-users of the requisitioned goods directly negotiated with suppliers.

In justifying the purchase, the chief executive claimed that the mandatory requirements were followed but admitted that some suppliers failed to submit some documents due to non-availability of notary public due to movement restrictions during the lockdown.

The COA also discovered that the LGU granted food allowance in the form of cash assistance to 800 frontliners in the amount of P1,500 each, with the total of P1.2 million charged against the BGCM fund.

The recipients were barangay officials and municipal personnel designated as Barangay Health Emergency Response Team (BHERT) in each barangay.

“Payment of food allowance in the form of cash assistance is clearly not considered COVID-19 related PPAs,” the commission stated, citing the DBM Local Budget Circular No. 125 dated April 7, 2020 covering guidelines on the release and utilization of the BGCM.

Reacting to the mayor’s strong opposition to the auditor’s recommendation that the BHERT members refund the cash assistance, the COA stressed that the prohibition is clear and it cannot allow violation of rules over convenience.

In another finding, the audit team said the LGU’s distribution of P11.7 million worth of relief goods allowed family heads to claim two or more packs of goods by presenting several claim stubs while Relief Distribution Sheets had no signatures of claimants, with some sheets bearing erasures of names.

In all, 1,323 food packs were claimed by other persons while 1,438 packs were covered by RDS without signatures of claimants.

“Based on the foregoing, there was no assurance that 2,761 packs of relief goods costing P1.27 million were actually received by legitimate beneficiaries,” the COA said.

It also bared that out of the 200,000 kilos of rice to be distributes, only 130,220 kilos were properly accounted as distributed.

The LDRRM Officer, however, explained that due to the quarantine restrictions, the RDS were distributed first to barangay officials, who required beneficiaries to sign, followed by the delivery of the goods. He claimed that the punong barangays received most of the items and that there were no complaints received by the LGU during the operations.

On the Social Amelioration Program (SAP), the audit showed that emergency subsidies totaling P100,000 were granted to families with ineligible members who were either government employees, elected or appointed barangay officials or job order workers.

It also found that the P15,000 subsidy was paid twice to at least eight (8) 4Ps members, with the spouse registering in the database as head of family and then waiving his or her position in favor of his or her partner for the ESP.

In one case, one of the spouses living together represented herself as a solo parent while another family executed two SAC forms with the same family members in two different barangays and was able to collect twice the subsidy.

In the Tulong Panghanapbuhay sa Ating Displaced/Disadvantaged Workers Barangay Ko, Bahay Ko Disinfection/Sanitation Project (TUPAD-BKBK), 31 families who were already recipients of Assistance to Individuals in Crisis Situations (AICS) were granted a total of P96,100 in DOLE assistance despite not being entitled to it.

Justifying the grant, the LGU said that the TUPAD beneficiaries were approved by DOLE in early part of April 2020 but admitted that barangay officials assisted in the profiling.

The COA, however, pointed out that that SAP-AICS payments were made in April, 2020, prior to the TUPAD work on May 4-15, thus the 31 beneficiaries could have been excluded from the list.

In another significant finding, the team came across a cash advance for P3.21 million that was granted to the assistant municipal treasurer on Dec. 16, 2020, with the CA drawn without supporting documents and remaining unliquidated for over six months.

The cash advance covered the financial assistance received by the LGU from the national government for those affected by typhoons Quinta and Rolly.

The treasurer told the audit team that part of the CA was not yet released to beneficiaries, a justification not accepted by the COA which pointed out that the cash advance was drawn as emergency assistance, the implementation of which must be immediate.

“By allowing the unliquidated CA in the custody of the AMT for a period of six months exposed the fund to possible loss or misappropriation and use for personal purposes,” it noted.

The team noted that the liquidated documents were received by the accounting office on July 9, 2021, almost seven months from the date it was granted.

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