The provincial government of Catanduanes paid a total of P11.9 million to various pharmacies in 2024 through cash advances for the procurement of medicines and medical supplies without benefit of public bidding or any other mode of procurement.
In its significant finding, the Commission on Audit said the method of granting cash advances to disbursing officers for the individual purchase of drugs and medicines of patients did not comply with Republic Act 9184 or the Government Procurement Reform Act despite the intention of the outsourcing scheme of the Eastern Bicol Medical Center EBMC) to provide free drugs and medicines to indigent patient under the No Balance Billing (NBB) Program.
“Cash advance is a mode of payment, not a mode of procurement,” the audit report stated. “By providing cash directly to guardians/patients from cash advances drawn by the DOs, the PLGU is essentially bypassing the procurement process, which could lead to issues such as, potential overpricing, or the possibility of purchasing substandard goods.”
It noted that a certification stating that medicines purchased charged against the NBB cash advance were not available at the pharmacy, was attached to the voucher.
The audit team said that the decision by the EBMC to outsource from nearby pharmacies due to the unavailability of medicines in its own pharmacy further complicates the situation.
Among the multiple implications cited in the report were: consistency and quality of drugs are not ensured as medicines are sourced from multiple pharmacies rather than one central source; outsourcing could result in higher costs, as prices from different pharmacies may vary; and, managing multiple suppliers or pharmacies can create logistical challenges, including ensuring that the medicines reach the intended patients in a timely and efficient manner.
It stressed that the NBB policy is designed to ensure that indigent patients do not have to pay for medical expenses, with the government covering the cost of necessary treatments and medications.
“It does not provide a valid justification for circumventing procurement procedures,” the COA stated, as the NBB policy and procurement process are separate, the NBB policy is not a procurement mechanism, and accountability and transparency are compromised.
For the NBB program to function effectively, the PLGU must ensure compliance with PhilHealth Circular 2017-006 and RA 9184 for the procurement of medicines and medical supplies in order to ensure that drugs and medicines are available in the hospital along with its quality and price reasonableness, it added.
It recommended that the local chief executive require the Chief of Hospital to prepare or maintain a data base of the commonly purchased drugs and medicines based on the doctors’ prescriptions and illness for reference in the preparation of Purchase Requests; direct the Bids and Awards Committee to prioritize the evaluation and award of medicines and other medical supplies of the EBMC to sufficiently address the needs of patients under the NBB Program; limit the grant of cash advance to Disbursing Officers for the purchase of drugs and medicines in the implementation of the NBB Program; and, require the strict compliance with PhilHealth Circular 2017-006 and RA 9184 to avoid possible disallowance.