COA recommends probe of ex-GSIS chief Garcia, 9 others

MANILA, Philippines — The Commission on Audit (COA) has recommended to the Office of the Ombudsman that it investigate former Government Service Insurance System (GSIS) president Winston Garcia and nine other former officials of the state-pension agency in connection with the alleged anomalous procurement of anti-flu drugs in 2006 amounting to P25.132 million.

In a decision dated July 4, the COA-Commission Proper upheld the May 21, 2015 decision of its Corporate Government Sector Cluster 2 affirming the validity of a Notice of Disallowance (ND) issued against the GSIS on Jan. 24, 2012.

The subject of the ND was the procurement of 476,300 capsules of Oseltamivir or Tamiflu – an anti-viral drug used to treat and prevent influenza – in 2006.

COA said it found no merit in the petition for review filed by Garcia and other members of the GSIS Board of Trustees on June 18, 2015.

It also rejected the argument of Garcia and the other GSIS board members that the purchase was done in good faith with the aim of protecting its officials and employees from possible outbreak of Avian Influenza.

“The procurement of Oseltamivir capsules by the GSIS was properly disallowed, being an unnecessary and irregular expenditure of government funds,” the COA decision read.

“It must be emphasized that the fund of GSIS is a social insurance fund, which shall be used to finance the benefits administered by the GSIS. The procurement of medicine for the treatment of afflicted GSIS members is not a benefit that is being administered by GSIS,” it added.

“Moreover, no national emergency was declared by the President of the Philippines as to the outbreak of Avian Influenza in the country at the time the medicine was purchased. Thus, there is no urgent necessity for the procurement thereof.”

Besides, COA said, the contract for the supply of the drugs was awarded to United Laboratories Inc. without the benefit of public bidding, in violation of Republic Act 9184 or the Government Procurement Reform Act.

“Resort to the alternative method of procurement was not justified. Records are bereft of any evidence showing that the bids and awards committee recommended the use of the alternative method, as required under Section 12 of RA No. 9184. Thus, the procurement was attended with irregularities, which makes it disallowable in audit,” COA said.

The audit body also cited the previous reports of its resident auditors which revealed that out of 476,300 capsules ordered, only 109,880 had been distributed, while the remaining 366,420 capsules worth P18.979 million remained in stock and “were about to expire at the time of the auditor’s inspection” in 2010.

“Thus, there is an imperative need to investigate the persons responsible for the non-distribution of the purchased medicine, considering the costs involved,” the COA said.

COA directed its Legal Services sector to forward the records of the case to the Office of the Ombudsman “for investigation and filing of appropriate criminal and/or administrative charges, if warranted, against the persons liable for the transaction.”

It also directed Garcia and the other former GSIS officials to return the entire P25,132,367.28 subject of ND No. 12-001-OE-(06) dated Jan. 24, 2012.

Aside from Garcia, the other officials identified as liable for the transaction and for the return of the disallowed amount were then GSIS Board of Trustees members Bernardino Abes, Jesse Andres, Daniel Gutierrez, Reynaldo Palmiery and Jesus Santos, as well as then GSIS vice president for medical services Angel Concepcion Jr., vice president for general accounting and budget administration for central office Esperanza Fallorina, senior vice-president for administration group Concepcion Madarang and executive vice-president for operations Consuelo Manansala.