Aside from the alleged irregularities in the procurement of P41-million worth of abaca suckers under a rehabilitation program in 2023, the Commission on Audit had other significant findings in various transactions in the provincial government of Catanduanes during that year.
The adverse finding on the abaca rehab project funded by the Department of Agriculture was among the several transactions in 2023 reviewed by the audit team, which warned that transactions which were deemed irregular may be suspended and/or disallowed in audit.
In the evaluation of the project, which was reported by an online news website, the COA said that the procurement and delivery of abaca planting materials, digging bars and backpack sprayers to qualified farmer-beneficiaries was awarded to the supplier via negotiated procurement on May 23, 2023.
The supplier agreed to deliver 1,377,700 pieces of abaca suckers to the provincial government at a contract cost of P41.26 million, with two deliveries inspected and accepted as completed.
However, the auditors said that there was no actual delivery of the suckers to the supply office as the suckers were sourced from the abaca farmer-beneficiaries themselves.
The audit showed that, after the contract was perfected, the local chief executive and the supplier agreed on the Terms of Reference (TOR) supplementing the original contract.
It said that one of the clauses in the TOR, requiring the supplier to source the suckers from the beneficiaries, is against the law as it gave the supplier undue favor.
The team confirmed from 2,243 recipients that they received P1,700 cash in payment for 100 suckers to be planted in their respective farms, with no suckers received from the provincial government,
Considering that the unit price per contract was P29.95 per piece, the agency could have saved a total of P17,841,215.00 had a special committee created for the project took over the distribution of the cash as payment for the suckers.
“Also, granting that Management’s distribution of cash to buy the farmer-beneficiaries’ planting materials in lieu of delivery and distribution of abaca suckers was made in good faith, there were no submitted documentation to prove that the total number of 1,377,700 abaca suckers were actually and completely planted in the respective abaca farms of the 13,777 recipients,” the audit report stated.
It recommended that management submit valid justification for the award of the contract to the supplier despite knowledge that the suckers were to be sourced from the farmer-beneficiaries; require the Inspectorate team to justify the certifications made despite non-delivery of the goods; conduct an impartial investigation and institute appropriate sanctions against responsible personnel; and consider blacklisting the supplier and impose liquidated damages.
A technical review and evaluation likewise revealed that the contract costs of various infrastructure projects totaling P18.4 million exceeded the COA cost estimate of P15.1 million, resulting in a variance of P3.2 million due to a higher computed unit cost and estimated quantity.
The projects were identified as Extension of Wagdas Seawall in San Andres (P4.8 million), Extension of San Vicente River Control in San Andres (P4.8 million), Widening/Improvement of Penafrancia St., Cavinitan, Virac (P3.87 million) and Widening of Marilima Provincial Road in Virac (P4.8 million).
The audit team recommended that concerned personnel of the Provincial Engineering Office (PEO) submit a written explanation or justification of the variance, which it said is disadvantageous to the government.
A subproject of the Philippine Rural Development Project (PRDP) covering the Concreting of Ogbong to Mabini Farm-to-Market Road with a contract cost of P176.9 million was found to have a deficiency of P1.6 million pertaining to shortage in length and quantity of some items of work.
The COA urged the local chief executive to require the contractor to accomplish the deficiencies and repair defects on the pavement, and the Provincial Engineer, Project Engineer and Inspectorate Team to explain the observed deficiencies.
Similar deficiencies were also noted in seven other infra projects with a total contract cost of P39 million.
On the other hand, a fund transfer from the Department of Energy (DOE) amounting to P187,272.20 for the province’s hosting of an energy resource or energy-generating facility was found to be unutilized as of Dec. 31, 2023 due to absence of proper communication between concerned departments.
The audit also discovered that while 76 percent of the 114 projects, programs and activities under the 20% Economic Development Fund were completed, three were still on-going as of year-end while 24 were not implemented.
The grant of P620,500.00 in monthly honoraria for a committee handling special projects such as the abaca rehab project was flagged by the COA for not being based on approved guidelines.
Also noted by the team was the province’s disbursement of a total of P474,000.00 in funding for honorarium and prices for its Christmas party as well as lighting and Pasko sa Kapitolyo.
“Christmas is considered as religious event and expenses relative to its celebration is not for public purpose,” the COA said, although the management contended that the expenses were for the year-end assessment activity and that the Christmas decorations within the Capitol has been a tradition and is considered as a tourism promotional tool and activity of the local government.
Other significant findings include the following: unliquidated cash advances amounting to P1.4 million, excluding P18.8 million in confidential and intelligence funds; disbursements for progress and final payments on infrastructure projects totaling P80.43 million made despite documentary deficiencies; amd failure of the BAC Technical Working Group (TWG) to completely and properly review/evaluate technical documents resulting in the award of contracts to contractors with the same key personnel and equipment pledged to other projects with overlapping contract duration.