TESDA electronic portal project highly irregular, says COA

MANILA, Philippines - State auditors have tagged as highly irregular the electronic portal project of the Technical Education and Skills Development Authority (TESDA) involving funds worth more than P30 million, even recommending the investigation of agency officials who “disregarded” rules on bidding in approving the questionable contracts.

A report of the Commission on Audit (COA) questioned the contracts for the project in 2007 and 2008, citing irregularities like the supposed ineligible but winning bidder, the payment of millions of pesos to the company despite the failure to deliver some components of the project, and the project’s not having been included in the agency’s Annual Procurement Program.

“In 2007, the project was not duly funded, the bidding processes were disregarded, the financial capability of the contractor was questionable and part of the subject matter contract were not complied with, yet the contract was executed and amount of P29,343,600 was fully paid in less than two months. In 2008, the amount of P3,927,820 was also paid despite the same observations,” the COA report stated.

The COA report cited that the e-TESDA portal was aimed at, among others, improving service delivery of technical vocational education and training (TVET) programs to trainees of the TESDA by giving them a “technology-driven and managed learning environment.”

Information available on the portal includes TVET courses being offered by the agency, postings for training service providers seeking TESDA accreditation, and details on scholarships being offered by the agency, among others.

It had a total budget of P30 million, which was split among project concept, customization, training and documentation; Internet connectivity; integration of content; and provision of pre-paid cards.

A check made by the audit agency showed that the award of the contract to a company – Prime Logic Corp. – was “highly irregular,” because the firm was allegedly not eligible to bid and the papers needed for the contract’s technical review were not submitted.

“PLC had failed the eligibility check, and should not be liable to participate in the bidding. However, despite this observation, PLC was instead awarded the contract,” they said.

“Likewise, the BAC (TESDA’s Bids and Awards Committee) failed to submit the bid documents of the other short-listed bidders (Total Information Management, Softrigger Interactive. Inc.) and the corresponding official receipts issued by TESDA for their purchase of said documents, despite the (audit) team’s request to submit the same,” they added.

State auditors said that a copy of PLC’s Securities and Exchange Commission registration certificate showed a paid-up capital of only P500,000 “which is disproportionately very low compared to the contract amount of P29.34 million.”

The COA report also revealed that the project was not in the agency’s procurement program for the year. When the audit team earlier repeatedly asked for the document, COA auditors were even given a copy of a memorandum issued by TESDA Director General Augusto Syjuco, requiring the “Procedural Guidelines for Obtaining Access by the Public to Official Records and Documents” – something that the auditors protested against since they are not covered by these rules and have authority to require submission of such documents.

There is no record showing that the agency had submitted its plans to the Commission on Information and Communications Technology Center, or that the center had approved the plan.

State auditors said their verification “did not show inclusion” of the e-TESDA Prepaid Card Enabled Portal project in the agency’s capital outlays. Since there was no capital outlay for the project, the agency’s budget division claimed the funding was from the “40 percent budget of the regional offices” – which was negated by the Department of Budget and Management.

The COA report showed that the Certificate of Availability of Funds issued by the agency’s budget division stated that the funding for the project was sourced under three Special Allotment Release Orders, but the fund transfers were supposed to be for maintenance and other operating expenses and not for capital outlay, which should have been the source of the funds.

According to the report, the contract amount of P29,343,600 was paid on Nov. 15, 2007; Dec. 18, 2007; and Dec. 27, 2007.

“In a record time of less than two months, the contract was executed and fully paid, despite the fact that the P2 million worth of prepaid cards to access the e-TESDA portal were not yet delivered. Incidentally, up to the time of writing this report, the subject prepaid cards have not been delivered,” state auditors said.

They also criticized the fact that the detailed training for the operation and maintenance of the portal, which was indicated in the contract’s terms of reference, were also not conducted. In fact, the portal was not yet fully operational during its beta testing from January to June 2008.

“All these resulted in giving undue benefits to Prime Logic Corp., sanctioned under... the Anti-Graft and Corrupt Practices Act,” they said.

State auditors maintained that “the e-TESDA portal project is not funded, yet it was fully paid, contrary to Sec. 85, Presidential Decree 1445 (Auditing Code of the Philippines), which requires that no contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefore.”

“Hence, the subject contract is void pursuant to Sec. 87 of the same PD1445. This provides that any contract entered into contrary to said provision shall be void, and the officer or officers entering into the contract shall be liable to the government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties,” they said.

The COA report also noted that the audit agency requested the TESDA “on several instances” to submit the bidding documents and other papers to review the financial and technical aspects of the 2007 contract but the same documents were not submitted. These were the copy of the approved budget of the contract, its detailed cost breakdown, and the detailed breakdown of the financial proposal of the consultant of the contract. This was also true in the case of the contract for enhancement of the portal in 2008.

And when state auditors signed up in the portal in July 2009 to check the supposed “enhancement” of the portal - which was the goal of the 2008 contract - “the-Learning site is not functional because there is no link.”

Apart from other alleged “non-functional” portions of the portal, state auditors also found that no training courses could be accessed there. “The purposes for which the project, customization of the prepaid e-TESDA portal, was conceptualized were not realized.”

But in its response to the audit observations, the TESDA maintained that there were no other bid documents from other bidders as there was only one bidder who responded to the call for bid for the project. It also defended the capability of the winning bidder to undertake the project.

TESDA management also claimed that the e-TESDA portal was “duly budgeted” and that to believe that the funds from its regional schools were diverted for the project was “presumptuous and out of order.”

As to the non-delivery of the prepaid cards, the agency said the entire quantity of the cards were not delivered yet because “since the e-learning in the portal has yet to be subjected to actual real-world exposure, the exact denominations of the pre-paid cards are yet to be determined.”

“The goods and services required for the e-TESDA Portal have been delivered and what have been delivered are operational. As a customized portal, it is expected to undergo further, to a certain extent, never-ending refinements and enhancements,” the TESDA management also said in its response to the COA observations.