The Commission on Audit (COA) has revealed the Mabalacat City government committed procurement law violations “in the procurement and distribution of an aggregated total of P100,989,073.08 worth of welfare goods and relief packages related to COVID-19 pandemic through emergency procurement.”
The 2020 annual audit report for the city also showed incomplete documentation and unsubstantiated cash advance amounting to P57,025,957.22. The disbursement vouchers were not also supported with complete documentation or with documentary deficiencies contrary to Section 4(6) of PD 1445 casting doubt on the validity and propriety of affected disbursements.
Also, the liquidation documents of cash advances granted for the city’s COVID-19 proactive measures to its officers and employees totaling P6,650,000.00 were not yet submitted to the audit team headed by Marc Anthony P. Sazon contrary to Item 1.1 of COA Circular No. 2012-001 dated June 14, 2012.
The audit team also found several violations in the 20% Development Fund (DF). The COA report said, “The city’s budget commitment for 20% development fund was short by P33,794,260.00 or 23% of the prescribed 20% of its Internal Revenue Allotment (IRA) as a result of realignment of funds to the Mayor’s Office contrary to Section 336 of RA No. 7160.”
COA Regional Director Ma. Corazon S. Gomez called the attention of the city government headed by Mayor Crisostomo Garbo to address the audit observations:
“Infractions were noted in the procurement and distribution of P100,989,073.08 worth of relief packages during the incurrence of the State of Public Health Emergency, as evidenced by (a) failure to submit the amended Annual Procurement Plan (APP) containing the procurement project subject to negotiated procurement (emergency cases); (b) non-preparation of Project Procurement Management Plan (PPMP); (c) weakness in internal control in the inventory management system in the distribution of relief assistance; (d) specifications or brand name not precisely defined in the purchase orders which may ultimately lead to loss of government funds and may hamper the timely and efficient implementation of emergency measures in addressing the foregoing pandemic contrary to Section 4 of RA No. 11469 or the Bayanihan to Heal as One Act.
Meanwhile, some barangay officials revealed that (i) not all relief operations of the city were coordinated with the barangay office; (ii) some barangay officials have direct access to the Mayor’s Office to request for additional relief packages without the need for acknowledgment letter; (iii) most of the relief operations were done on main barrios; and (iv) some barangays need to conduct their own relief operations for informal settlers and other remote areas.
Further, review of disbursements showed the brand name of the items purchased were not indicated in the purchase orders nor in the sales invoices. The brand is essential in a contract to evaluate the reasonableness of the price as compared with the prevailing market prices and to validate if the price of the contract is the most advantageous price awarded to the government,” the audit report said. The city government replied that the brand names will be sufficiently indicated in the sales invoice or delivery receipt. Officials vowed to comply with the audit recommendation.
Audit of various transactions for CY 2020 also revealed that 11 disbursement vouchers amounting to P57,025,957.22 “showed absence of the necessary supporting documents or with documentary deficiencies” such as Check No. 511501 dated January 16, 2020 payable to PHILHEALTH amounting to P20,073,600.00 was not supported with the list of members including amount of contribution/premium from January 1 to December 31, 2019, barangay identification documents, and certificate of indigency or its equivalent thus impeded the verification/determination of qualified members.
Absence of said documents cast doubt on the propriety and regularity of the claim, the COA reported added.
In its compliance audit, the COA report disclosed the city government appropriated a total of P160,000,000.00 or equivalent to 20% of its Internal Revenue Allotment for its development projects, however, thru an enactment of Appropriation Ordinance No. 19 dated April 20, 2020 as presided by Vice Mayor Gerald Aquino, the city government realigned a portion of its 20% development fund budget amounting to P35,000,000.00 to the Mayor’s Office as financial assistance for COVID-19 affected families thereby leaving a shortage of P33,794,260.00 or 23% of the total appropriation for development projects.
“Section 287 of the RA No. 7160 provides that every LGU shall appropriate in its annual budget no less than 20% of its annual internal revenue allotment for development projects. Likewise, Section 336 thereof states that funds shall be available exclusively for the specific purpose for which they have been appropriated. No ordinance shall be passed authorizing any transfer of appropriations from one item to another. All COVID-19 related programs, projects, activities to be funded by LGUs should be part of their approved Annual Investment Program. In case the COVID-19 related PPAs are not among those included in the approved AIP, the local development council shall prepare a supplemental investment program for the purpose to be approved by the local sanggunian,” the COA report pointed out.
The state auditors also noted deficiencies on the “distribution and implementation of the Social Amelioration Program-first tranche (SAP-1) including the (a) unliquidated SAP-1 and unutilized funds of P923,000.00 not yet returned to the Department of Social Welfare and Development (DSWD); (b) unsubmitted Social Amelioration Card Forms and photo of beneficiaries during the actual receipt of SAP-1; (c) not orderly arranged IDs and names of beneficiaries in the SAP-1 payrolls; and (d) discrepancies between the city government’s list of SAP-1 with that of the DSWD’s List or SAP-1 payrolls contrary to the provision in the Memorandum of Agreement between the DSWD and the Mabalacat LGU dated April 2, 2020 which pose risk on the government funds to possible misappropriation.”
The COA said that it publishes the annual audit reports of government agencies particularly local government units (LGUs) and are made public for transparency.