COA asks Cebu town: Why are your calendars late?

CEBU, Philippines – Government auditors called out officials of the southwestern Cebu town of Alegria for spending P345,000 on wall calendars for 2022 that were delivered only at the end of May that year, and at a fewer quantity than what was contracted.

The Commission on Audit (COA) said the transaction was “irregular and unnecessary,” and resulted in a “waste of government resources.”

“The items were delivered and accepted only on May 31, 2022, hence the pages for the months of January to May were already unusable and worthless,” COA said in its recently released audit report on Alegria.

The purchase was made during the mayorship of Verna Magallon, who is now the vice mayor.

It was an honest mistake, Alegria’s information officer and chairman of the bids and awards committee (BAC) Jesus Rey Cavalida said in an interview.

Cavalida said the purchase was processed late because of the pandemic and the town’s systems and processes normalized only at about the time when the transaction was initiated. He said there was already a purchase request and they had to process it.

Alegria first posted an invitation to bid for 4,600 wall calendars on March 3, 2022. It was declared a failure. A second invitation to bid was posted on April 21, 2022. A supplier that submitted a bid for P345,000 won the project, passed the eligibility check, and was declared by the town’s BAC as “the single lowest calculated and responsive bidder.”

Auditors who reviewed the documents said, however, that the winning supplier had a negative net financial contracting capacity (NFCC), which determines financial eligibility to undertake contracts.

“This deficiency is a clear manifestation that the post-qualification process of the procurement was not properly conducted,” COA said.

Cavalida said they will look into their processes and study the updating of supplier information for the computation of NFCC.

Auditors also found that only 4,000 pieces were indicated on the purchase order, delivery receipt, and acceptance report. But despite what auditors said were “glaring deficiencies,” the supplier was still paid P345,000 on June 6, 2022.

COA asked Alegria officials to submit an explanation “categorically stating the purpose and welfare that this procurement…has provided to the constituents,” and to provide proof of distribution of the calendars. Auditors also asked the BAC to explain why the supplier was declared the winning bidder despite the deficiencies.

If COA issues a notice of disallowance, the amount spent on the calendars must be returned to government coffers by those involved in the transaction.

COA also called Alegria’s attention over the payment of P254,075 in Philippine Health Insurance Corporation contributions of job order workers, who are not covered by this benefit due to the lack of an employer-employee relationship. Auditors said this was an “irregular expenditure.” They found that “the contributions were not deducted from the salary of the JO workers,” but from the town’s money.

COA said in its report that Alegria officials agreed to stop the practice. – Rappler.com