Town gave advance pay for contract not approved by mayor, council - COA

CEBU, Philippines - The Commission on Audit (COA) has directed the Municipality of Alcantara to refrain from entering into a contract for the delivery of goods and services that require advance or down payment.

This after the town made a payment of P63,464.03 to Anloy Doors Corporation for the installation of four sets of roll-up doors for the Bagsakan Center at the Alcantara Public Market despite the fact that the services have not yet been rendered.

The payment was made on June 5, 2009, but the doors were installed only on June 18, 2009.

The advance payment made represented 50 percent of the total contract price of P 126, 928.06.

COA said the municipality violated Sec. 338 of the Local Government Code, which states that no money shall be paid on account of any contract under which no services have been rendered or goods delivered.

COA found out that it was the municipal engineer, Arturo Palencia, who entered into a contract with Anloy Doors Corporation on May 26, 2009 without authority from the Municipal Mayor and prior authorization by the Municipal Council.

COA recommended that the municipal engineer or any department head should not be allowed to enter into a contract in behalf of the municipality since it is only the local chief executive - with prior approval from the Sangguniang Bayan – that is allowed to do so as stated in Sec. 22 of the Local Government Code.

Under COA Circular No. 2009-001, the audited agencies are required to furnish the Auditor with a copy of contracts and purchase orders within five working days with the supporting documents for the review.

But the members of the Bids and Awards Committee (BAC) failed to submit copies of the contract and purchase orders within five working days and the documents were not immediately relayed to the management for appropriate corrections.

COA requested that copies of perfected contracts or purchase orders should be submitted to the auditor within five working days so that the documents could be reviewed and any deficiencies could be relayed to management on time for correction.

COA cited that in 2008, officials and employees of Alcantara were granted additional benefit or extra cash gift amounting to P969, 000 even if the town already went beyond the 55 percent limitations on the budget for Personal Services, contrary to the Local Budget Memorandum No. 54 dated December 19, 2007.

The municipality still failed to implement COA’s recommendation that all officials and employees who received such benefit at P17, 000 each should refund said amount. (THE FREEMAN)