MANILA, Philippines — The Commission on Audit (COA) has struck down the 2006 procurement of anti-flu drugs worth P25 million authorized by then Government Service Insurance System (GSIS) president Winston Garcia and nine other ex-officials, calling it “irregular” and “unnecessary.”
In a decision dated Jan. 8, 2020, the commission affirmed the Notice of Disallowance (ND) which COA resident auditors earlier issued against the former officials of the state pension agency.
It also denied the petition for review of former GSIS Board of Trustees members Jesse Andres and Jesus Santos, seeking the nullification of the ND issued against the GSIS on Jan. 24, 2012.
The subject of the ND was the 2006 procurement of 476,300 capsules of Oseltamivir or Tamiflu – an anti-viral drug used to treat and prevent influenza – amounting to P25,132,367.28.
The commission found no merit in Andres’ and Santos’ defense that the purchase was done in “good faith” as a supposed pre-emptive measure to protect its officials and employees from a possible outbreak of avian influenza.
Andres and Santos also claimed that the purchase was within the powers of the Board of Trustees under Sections 39 and 41 of Republic Act 8291 or the GSIS Act of 1997.
However, the COA decision signed by COA Chairman Michael Aguinaldo and Commissioners Jose Fabia and Roland Pondoc maintained that the purchase of the anti-flu drugs was an unnecessary and irregular expenditure of government funds.
“Section 34 of RA No. 8291 provides that the contributions of the members, together with the earnings and accruals thereon, shall be used to finance the benefits administered by the GSIS and not for purposes other than what are provided under RA 8291,” the COA pointed out.
“The procurement of medicine for the treatment of avian flu is a health-related function which belongs to the secretary of Health who was designated by then president Gloria Macapagal-Arroyo as the crisis manager for the avian influenza under Section 1 of Executive Order No. 280,” it added.
Furthermore, COA said “there was no national emergency declared by the President of the Philippines as to the outbreak of avian flu in the country at the time the medicine was purchased. Thus, there is no urgent necessity for the procurement.”
The COA said Andres’ and Santos’ reliance on Sections 39 and 41 of RA 8291 as the source of their supposed authority in approving the procurement of medicine was “misplaced.”
“The said provisions of law did not expressly confer upon GSIS the power to engage in health-related services like the procurement of medicine for the treatment of illness of its members,” the COA said.
Besides, COA said the purchase was irregular as the supply contract was awarded to United Laboratories Inc. without the benefit of public bidding, in violation of Republic Act 9184 or the Government Procurement Reform Act.
The COA also cited the previous reports of its resident auditors which revealed that out of 476,300 capsules, 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.
The COA Proper had earlier denied the respective petitions for review of Garcia and the other GSIS officials for lack of merit.
Aside from Garcia, Andres and Santos, the other officials earlier identified as liable for the transaction and for the return of the disallowed amount were then GSIS Board of Trustees members Bernardino Abes, Daniel Gutierrez and Reynaldo Palmiery, 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.
The COA reiterated its recommendation to conduct further investigation on the transaction for possible filing of criminal and administrative charges.