COA flags incomplete Mandaue school kits

MANILA, Philippines —  The Commission on Audit (COA) has recommended that the Mandaue City Government demand from a supplier to complete the delivery or refund the cost of about 14,000 pairs of rubber shoes under a ?58.13-million procurement contract of school supply kits for Grades 1 to 3 learners.

COA also urged the city to compute and impose the appropriate liquidated damages against Bihis-Cruz Inc. for the delayed delivery, strengthen controls over the inspection and acceptance of supplies, and investigate the matter to determine accountability for the deficiency.

The procurement involved 17,100 sets of school supply kits funded through the Special Education Fund (SEF), with each set supposed to contain a customized backpack, physical education uniform, rubber shoes, notebooks, writing paper, sharpener, pencil case and pencils with erasers.

The total contract amounted to ?58,129,911. The city paid the supplier ?54,434,509.52, net of taxes, through a Land Bank of the Philippines check dated March 27, 2025.

COA said the supplier’s delivery on March 21, 2025 was documented through delivery receipts and a sales invoice listing all the items. The inspection report was signed by the GSO inspector on March 21 and by the custodian on March 25, resulting in the processing of the payment.

However, state auditors received certifications from various schools in February 2026 stating that the customized rubber shoes were not included in the supply kits distributed to Grades 1 to 3 learners.

The audit team then conducted validation procedures on March 16, 2026, by sampling three schools. The schools confirmed receiving the supply kits but said the rubber shoes were missing.

The DepEd Supply and Property Custodian told COA that he had also received feedback from recipient schools that no rubber shoes were included. The custodian said he initially assumed the shoes were packed inside the backpacks, which led to his signing of the inspection and acceptance report.

He said he verbally informed GSO personnel about the incomplete delivery but could no longer recall whom he had contacted.

A partial delivery of the missing shoes was eventually made on January 24, 2026. COA inspected the delivery at the DepEd office and found 60 sacks containing 50 pairs each, or a total of 3,000 pairs.

The audit team, however, found that about 14,000 pairs remained undelivered at the time of its audit.

The procurement required the supplier to deliver the items within 30 calendar days from receipt of the purchase order. The purchase order was signed by the supplier on March 5, 2025, setting April 6, 2025, as the delivery deadline.

The contract also provided for liquidated damages equivalent to one-tenth of 1% for every day of delay.

COA described the situation as “a substantial and unjustified delay in the fulfillment of the contractual obligation.”

The state auditors also identified a weakness in the inspection process, saying the discrepancy “appears to have resulted from limited inspection of delivered items and reliance on assumptions regarding the contents of unopened sacks.”

The GSO inspector told COA that only one sack was opened during the inspection. Since it contained rubber shoes, she assumed that the remaining sacks contained the same items and signed the inspection and acceptance report as complete.

COA said the full payment despite the incomplete delivery was not consistent with procurement and accounting rules.

“Full payment of the contract price notwithstanding indications of incomplete delivery and delayed fulfillment of contractual obligations is not consistent with RA No. 9184 and its 2016 Revised IRR and the Manual on NGAS for LGU,” the state auditors said.

COA further said the situation “deprived the City of the opportunity to timely enforce contractual remedies,” including the assessment of liquidated damages against the supplier.

Cortes defends bercede

Meanwhile, former Mandaue City mayor Jonas Cortes defended Vice Mayor Glenn Bercede, who was the acting mayor at the time of the purchase, and called for the complete timeline and supporting documents to be considered in the discussion.

Cortes said records presented to the government showed that the 17,100 school supply sets had been inspected and accepted as complete, adding that mayors rely on designated inspectors and property officers to verify deliveries.

“Dili man ang Mayor personally ang moabli sa matag sako, moihap sa matag sapatos, ug mo-inspect sa matag delivery,” Cortes said.

He also cited a May 21, 2026 DepEd document which, according to him, recorded the delivery of the remaining rubber shoes and listed the undelivered balance as “NONE.”

Cortes said Bercede should not be held personally responsible for deficiencies that were not disclosed to him at the time.

COA recommendations

COA recommended that the city require the supplier to complete the delivery of the lacking items or refund the amount corresponding to the undelivered supplies.

It also recommended that the city “compute and impose the appropriate liquidated damages for the delay in delivery,” strengthen internal controls over inspection and acceptance, and conduct an appropriate investigation to determine the underlying causes and establish accountability.

During the exit conference, the City Administrator informed state auditors that the matter had already been referred to the City Legal Office (CLO) for investigation.

COA said the city, under the new leadership of Mayor Jonkie Ouano, had also committed to improve its inspection procedures and consider imposing liquidated damages against the supplier. (CEBU NEWS)