Government auditors called out officials of the southwestern Cebu town of Alegria for spending P345,000 for wall calendars for 2022 that were delivered at the end of May, when half the year was gone, and at a fewer quantity than what was contracted. The Commission on Audit said the transaction was “irregular and unnecessary” and would be disallowed unless town officials could justify it.
It was an honest mistake, Alegria’s designated information officer and chairman of the bids and awards committee (BAC) Jesus Rey S. Cavalida said in an interview. He said they will just wait for COA to issue a notice of disallowance so that they can process the recovery of the amount.
The purchases were done during the term as mayor of Verna Magallon, who is now the vice mayor.
Waste of government resources
The delayed procurement of the calendars “impaired the usefulness of the goods,” the report said. Auditors said the town did not “consider judiciously the appropriateness to proceed” with the calendar purchase when it was already late in the year.
“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 the annual audit report of the town released recently.
COA said this raises doubt on the “propriety and practicability of the procurement” and resulted in the waste of government resources.
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 this.
The town 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.
Not properly conducted
“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 said they asked Alegria officials to justify the purchase by submitting an explanation “categorically stating the purpose and welfare that this procurement of wall calendar has provided to the constituents.” Auditors also asked town officials and they agreed to instruct the BAC to explain why the supplier was declared the winning bidder despite the deficiencies.
COA also told Alegria officials to submit proof of distribution of the calendar, otherwise, the transaction will be disallowed and the amount returned to government coffers by those involved in the transaction.
COA also called the town’s attention over the payment of P254,075 in Philhealth 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.” Auditors said the payment was done via cash advances to the disbursing officer. When auditors reviewed the transaction, they found that “the contributions were not deducted from the salary of the JO workers, instead the payments were made from the Municipality’s money.”
COA said in the report that Alegria officials agreed to stop the practice.