DOH fails to use P6.6 billion COVID-19 funds for 2021 – COA

MANILA, Philippines — The Department of Health (DOH) has failed to utilize a total of P6.649 billion of its COVID-19 funds for 2021, substantially affecting its pandemic response for the year, the Commission on Audit (COA) said.

In its 2021 annual audit report on the DOH, the COA noted that of a total P104.546 billion allotted by Congress to DOH for its COVID pandemic response for 2021, only P97.897 billion was obligated as of year-end, leaving P6.649 billion in unobligated or unutilized funds.

Furthermore, the COA said that of the obligated amount, only P74.241 billion was actually disbursed, which means that the DOH still has P23.656 billion in unpaid obligations as of end of 2021.

An obligated fund refers to the amount already set aside by the government agency for payments of its various expenditures, commitments, transactions or obligations, while the unobligated budget is considered as unutilized as it was not earmarked for any expenditure

“It could be noted that despite the extension of availability of Bayanihan Act II funds until June 30, 2021, a considerable amount of P6,648,559,212.03 was not obligated as of said extension date,” the COA report said.

The COA added that the amount of DOH’s unobligated allotment “is considered substantial enough to affect the level of the Department’s response to the COVID-19 pandemic.”

The COA said that of the unobligated allotment, only P1.285 billion is considered as continuing appropriations for 2022, while the remaining P5.364 billion can no longer be used by the DOH as their availability has already lapsed as of end of 2021 under the General Appropriations Act of 2020 and Republic Act 11494 or the “Bayanihan to Recover as One Act” (Bayanihan 2).

The lapsed allotment included funds sourced from loans from the Asian Development Bank (ADB) for the Health System Enhancement to Address and Limit (HEAL) COVID-19 Projects and from the the World Bank (WB) for the Philippines COVID-19 Emergency Response Project (PCERP) amounting to P1.367 billion and P1.013 billion, respectively.

Also part of the lapsed allotment was the P9.96 million in Miscellaneous Personnel Benefits Fund and P1.889 million in Special Risk Allowance of medical frontliners, as well as P2.956 billion in continuing appropriations from 2020 under Bayanihan 2.

“It should be stressed that the appropriations given to the DOH were based on the budget proposals which it vigorously defended during budget hearings. The failure to fully utilize the legislated budget could mean that the DOH had set ambitious targets that led it to propose such huge amount of appropriations without carefully considering its own absorptive capacity as well as those of its Centers for Health Development (CHDs) and operating units (OUs),” the COA said.

“Hence, the low utilization thereof can be counter-beneficial to the continuing efforts of the DOH towards ensuring access to basic public health services to all Filipinos and controlling the spread of COVID- 19,” the COA added.

Improper distribution

The same audit report noted “deficiencies” in the distribution of P185.603 million worth of COVID-related items which the DOH procured in 2020 and 2021 through the Procurement Service of the Department of Budget and Management.

The COA said that P166.21 million of the procured items were supposed to be delivered to the Cagayan Valley CHD, Southern Isabela Medical Center and the Ninoy Aquino Stadium COVID site at the Rizal Memorial Sports complex in Manila, but none of these three intended recipients received the supplies.

“The confirmation replies pertaining to three recipient-agencies disclosed that the items were delivered to offices/regions other than (the ones) indicated in the DL (distribution list),” the COA said.

Instead, the COA said, a portion of the procured items was instead diverted to the Office of the Civil Defense while the bulk of purchases went to unidentified individuals and offices.

“Items totaling P54,180,412 were received instead by the OCD while a total of P108,609,640 were received by individuals whose office/agencies could not be identified,” the audit report read.

Meanwhile, P18.557 million worth of COVID-related supplies were also not received by the six intended recipients – the Northern Mindanao CHD, Dr. Jose Rizal Memorial Hospital in Dapitan City, Margosatubig Regional Hospital in Zamboanga del Sur, the Department of the Interior and Local Government, Department of Education and the Maria Lourdes Maternity Hospital in Makati City.

The Metro Manila CHD and Caraga CHD, meanwhile, confirmed receiving their supplies, but the COA said there was a delivery shortage of at least P835,402 based on the actual quantities received by the two CHDs as compared to what was declared in the DL.

Questionable procurements

The COA also flagged the DOH’s procurement projects for 2021 amounting to P3.078 billion due to “deficiencies” and non-compliance with the provisions of RA 9184 (Government Procurement Reform Act).

“Several deficiencies were noted in the procurement of goods, infrastructure projects and consultancy services by various CHDs and OUs totaling at least P3,077,798,587.03, such as improper computation of ABC (Approved Budget for the Contract), use of improper procurement modality, failure to follow prescribed bidding procedures, procurement prior to approval of Annual Procurement Plan,” the COA said.

Other deficiencies noted by the audit body were “awarding [of] contract to ineligible bidder, insufficiency or lack of warranty securities, lack of documentation, delays in delivery of goods and services and implementation of infrastructure projects and other lapses in contract implementation.”

The COA attributed the deficiencies to the failure of the CHDs and OUs to judiciously plan their procurements, conduct early procurement activities and provide relevant training for their personnel assigned in procurement activities.

The COA recommended to the DOH to conduct early procurement activities to ensure the timely delivery of needed goods and services as well as timely implementation of infrastructure projects.

The COA said that the DOH must also impose liquidated damages against the contractors and suppliers for every delayed delivery or completion of procured goods and services.

Searching for answers

For its part, the DOH said it is already looking into the messy distribution of medical supplies and equipment as reported by COA.

DOH officer-in-charge Maria Rosario Vergeire said they received the COA report last July 29 and are now making verifications for an appropriate response.

“We are given 60 days for that. We’re attending to it now. We are looking at the difference between the COA report and our inventories to find out,” Vergeire said in a radio interview.

“We really went down to our local governments, our regional offices in order to see what really happened. We conducted wall-to-wall inventories,” she added in Filipino, stressing the DOH’s desire to determine where the COA data came from.

Concerning the expired vaccines, Vergeire said 32,724 vaccine doses can no longer be replaced by the COVAX Facility because they have already expired.

But 12,854 vials that are nearing expiry will be replaced by the COVAX Facility at no cost.