The Commission on Audit has recommended that the municipal government of Bato impose sanctions and penalties on a local contractor for failing to complete a P4.69-million slaughterhouse project funded largely by the national government.
In its 2023 audit report on transactions of the LGU, the COA blamed improper project monitoring by the agency and the inability of the contractor to comply with remedial measures for the termination of the Rehabilitation/Improvement of Slaughterhouse, the funds of which were sourced from the Local Government Support-Growth Equity Fund (LGSF-GEF) of the Department of the Interior and Local Government (DILG) in 2022.
The GEF is intended to provide support to funding requirements of programs, projects and activities of poor, disadvantaged, and lagging LGUs in assuming devolved functions in the delivery of basic services and facilities, with Bato among the qualified recipients.
The report stated that the municipality received the funds for the improvement of the slaughterhouse in barangay Tamburan in August 2022, with the Bids and Awards Committee (BAC) awarding the contract to the lone bidder on Nov. 24, 2022 and issuing the Notice to Proceed five (5) days later.
During the implementation of the project, an inspection conducted by DILG and the Municipal Engineering Office on Feb. 15, 2023 found out that, among others, that there was mud and dirt in the gravel piles being used by the contractor and told the contractor not to use the existing stockpile.
Despite this, the contractor, Tardz Engineering Construction, proceeded with the concrete pouring two (2) days later using the muddy aggregates without permission from the MEO.
It likewise requested payment of 70 percent of the project accomplishment on Feb. 20, 2023, with the municipal engineer informing the mayor that the grant for partial payment be denied, citing observations that the concrete slab was weak due to the use of muddy aggregates.
The DILG representatives also recommended that the LGU conduct strength tests on the concrete slab, which was noted to have scaling, flaking and visible mud residues.
The mayor and the engineer subsequently suspended work on March 21 and notified the contractor of the concrete core drilling test to be conducted the next day.
Test results from the Bicol Testing Center revealed that three samples taken from the slab obtained an average compressive strength of just 872 psi compared to the 3,000 psi required for concrete at 28 days.
This prompted the chief executive and the ME to direct the contractor to resume work, with instructions to remove and replace the concrete slab.
With the contractor failing to comply with the order, the mayor issued a notice of termination of the contract on August 3, 2023 due to inaction or default but the contractor, through counsel, filed suit with the Construction Industry Arbitration Commission seeking to stop the rebidding of the project.
Unable to utilize the P4.69-M funding within the validity period, the LGU was forced to return the full amount to the Bureau of Treasury.
The audit team faulted the municipal engineer for failing to appropriately oversee the project to ensure the proper construction methods were employed, noting that contractors are not allowed to start any concreting without a pouring permit.
Likewise, it observed that the LGU failed to take over the terminated contract by entering into negotiated procurement or proceed with the rebidding process to facilitate the utilization of the fund before the lapse of the validity period.
In another significant finding, the COA also discovered that a completed infrastructure project and several procured equipment and machinery funded from the 20% Development Fund for CY 2023 were not fully operational or utilized several months later.
The audit team said the renovation and upgrading of the existing health station in Batalay which was damaged by super typhoon Rolly in 2020 was allocated P1.5 million and was completed on Nov. 10, 2023.
However, an ocular inspected by the team on Feb. 19, 2024 showed that it was not operational, with LGU officials claiming that the Rural Health Unit was still waiting for materials and equipment to be provided by the Department of Health.
The Bato LGU also procured about P1.5-M worth of water sports equipment such as kayak boats, water tubes, water bikes which were all delivered by October 2023 but the same remained unused four months later.
The audit team noted that the municipality lacked a comprehensive plan for the Bato River Park as well as an approved operations manual on how the equipment will be used and maintained for local tourism development.
During the same year, the LGU also purchases three mechanical rice reapers for a total of P1 million for distribution to three (3) irrigators’ associations but, like the water sports gear, remained undistributed by February 2024.
“Absence of judicious planning caused the completed projects and equipment of the LGU totaling P3,982,962.35 to remain non-operational and unutilized, resulting to delayed enjoyment of project benefits or eventually may result to wastage of government funds,” the audit team stressed.
In its comment on the findings, the municipal health officer said coordination was done with the engineering office for the removal of supplies left by the contractor and the cleaning of the facility, which the DOH said can be used even without the equipment from DOH.
On the water sports equipment, the municipal tourism officer said during the exit conference that the overall program of the river park was already being reviewed by the Sangguniang Bayan.
In another finding, the auditors described as “extravagant” the conduct of a training on the formulation of the Local Climate Change Adaptation Plan (LCCAP) outside the province that cost the LGU nearly half a million pesos.
The report said the LGU spent P98,000 each for hall rental with meals and snacks as well as hotel accommodation for the 18-member LGU Core Team at Perdana Hotel in Makati City from Aug. 29 to Sept. 1, 2023.
It likewise incurred an additional P275,000 for the travel and transportation expenses of the participants.
The auditors cited DILG Memorandum Circular No. 2011-59 which strongly discourages the conduct of training, seminar, workshop or similar activity outside the geographical island where the LGU is located.
Municipal officials, however, reasoned out that there were no available speakers to enable the conduct of the training on the island and that only the Climate Change Commission is authorized to conduct said training.
Among the other findings of the audit team were: failure to operationalize the P2.5-million Bato Ecological Park for solid waste management; use of shopping as procurement mode in the acquisition of goods and services totaling P2.1 million which are not categorized as ordinary or regular office supplies; and, lack of judicious planning in the participation of elected officials in seminars and assemblies of various government organizations, for which the LGU paid a total of P917,000 in registration fees.