COA smells Yolanda fund misuse

(The Philippine Star) - September 14, 2015 - 10:00am

MANILA, Philippines - Possible irregularities and numerous violations of the procurement law have been found in the way the Philippine Coconut Authority (PCA) spent P688.718 million for Typhoon Yolanda relief operations and its anti-coconut scale insect project last year.

Contracts were allegedly awarded to questionable suppliers using the emergency mode of procurement that gave “no assurance that the availed prices were most advantageous to the government,” according to the 2014 Commission on Audit (COA) report released over the weekend.

Concerned PCA personnel must face sanctions and be held liable for deviating from relevant provisions of Republic Act 9184, the Government Procurement Reform Act, as well as its implementing rules and regulations (IRR), the COA added.

The PCA had procured a total amount of P688.718 million in goods and services through emergency mode of procurement from various suppliers for the Yolanda Recovery and Rehabilitation Program (YRRP) and Coconut Scale Insect Emergency Action Program (CSIEAP) last year, records show.

Among those bought were farm tractors, chainsaws, saw mills, choppers, mung bean and corn seeds and various fertilizers from different suppliers like Ford Tractor Philippines, Deutche Motorgate Inc., Suki Trading Corp., NTDCY 888 Global Enterprise, Atlas Fertilizer Corp., UP Los Baños Foundation Inc., Ramgo International Corp., LM Arenas Agriproducts, GMG Agri Farm Products, Corrine’s Garden, Agro-K Philippine Corp., One Cypress Agri Solution Inc., Greenworld Agri-Farm Center, Philippine Association of Certified Pesticide Applicators Inc. and Leans Agricultural Products Corp., the COA report said.   

The PCA’s expenses for Typhoon Yolanda recovery activities and its anti-coconut scale insect program went against the IRR of RA 9184, specifically on the matter of procurement of goods and services which “shall be competitive and transparent,” state auditors said.

A review of documents supporting the awarding of contracts to the suppliers allegedly showed “documentary and procedural deficiencies, which is an indication that the bids and awards committee (BAC) and other officials concerned lacked sufficient awareness or knowledge in the procurement processes prescribed under RA 9184,” the COA report said.

No Project Procurement Management Plan (PPMP) and Annual Procurement Plan (APP) were made prior to or at the onset of procurement of goods and services, state auditors said.

No minutes of the pre-procurement conference exist, and in its absence “there is no evidence as to what transpired during the pre-procurement conferences, especially on significant matters that are necessary in the next phase of the procurement process,” the audit team said.

A BAC resolution showing the necessity of opting for emergency procurements and proofs of invitation letters to at least three prospective suppliers are also absent, casting doubt on whether invitation letters were ever sent and that the offer of the awarded supplier is the most advantageous to the government, state auditors said.

The audit team also questioned the absence of an abstract of bids in all the procurements; errors and inconsistencies in the audited financial statements of three suppliers; the non-submission of one supplier or any of its joint venture partners of the statement of ongoing government and private contracts, including contracts awarded but not yet started; and the non-inclusion of the mayor’s permit and tax clearance as among the eligibility requirements to be submitted by bidders.

One joint venture partner did submit a mayor’s permit that showed it is a registered wholesaler for agricultural equipment/spare parts/supplies and pesticides and not a contractor for pest control services, state auditors said. 

The audit team also observed that no computation of Net Financial Contracting Capacity (NFCC) was submitted to them in order to evaluate the financial capability of the supplier to execute the contract.

No approval from the PCA governing board was issued prior to the signing and execution of contracts, and no observers were invited in any of the procurement stages to assure transparency, state auditors said, among a number of other issues. 

“The aforementioned observations were contrary to the provisions of RA 9184, thus no assurance that the availed prices were most advantageous to the government,” the COA report said.

The PCA’s BAC must undergo training and/or re-training on the Procurement Law and its IRR, state auditors said. 

The PCA is a government-owned and controlled corporation under the Office of the President tasked by law to “promote the rapid integrated development and growth of the coconut and other palm oil industry in all its aspects and ensure that the coconut farmers become direct participants in, and beneficiaries of, such development and growth.”

Yolanda donations

Meanwhile, only P17 billion were actual donations in cash or in kind out of the P73 billion in foreign aid pledges from the international community following the destruction and death from Typhoon Yolanda, according to the Department of Social Welfare and Development (DSWD).

Of the P73 billion in foreign aid pledged, P45 billion were in cash and P28 billion were non-cash, Secretary Corazon Soliman said.

However, the Philippines only received P17 billion, she added. Of that amount, P1.202 billion in cash and 1.269 billion in non-cash were given to the government, Soliman said.

“The remaining P14 billion went to non-government or- ganizations and multilateral organizations, among others,” she said.“The DSWD received P1.1 billion both in local and foreign currency.”

The P1.1-billion cash dona- tion that the DSWD received for the rehabilitation of Yolan- da-stricken regions was used as intended, Soliman said.

As of yesterday, the DSWD has disbursed 84 percent of the donations it received.

The amount went to transi- tional shelter program, cash for work, ready-to-eat food items and medicine, demurrage fees, civil registry documents, sup- plies for children and adminis- trative expenses, among others. – Michael Punongbayan, Rainier Allan Ronda

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