MANILA, Philippines — The Philippine Health Insurance Corp. (PhilHealth) has placed government at a losing end with P153 million worth of “disadvantageous” information and communications technology (ICT) contracts it entered into with various suppliers, according to the Commission on Audit (COA)’s latest report.
In its 2019 annual audit report on PhilHealth, the COA said its Information Technology Audit Office (ITAO) has noted several deficiencies in seven ICT contracts entered into by the state health insurance firm from 2016 to 2017.
“Some of the technical specifications of the items delivered by the winning bidders for ICT projects/contracts entered into by PhilHealth with various suppliers in the aggregate amount of P153.100 million were not compliant with the agency/contract requirements; thus, disadvantageous to the interest of the corporation in particular and government in general,” the COA said.
The audit body said among the issues or deficiencies observed by its IT experts were outdated software, uninstalled hardware and lack of hardware and software utilization trainings.
The IT team also noted that some of the hardware delivered were “out of specification” or “non-compliant” with contract requirements. The IT team said some of the delivered hardware remain unutilized at the time of inspection.
The IT auditors also said the suppliers’ compliance to other requirements of the projects/contracts “cannot be verified due to lack of documentation.”
“These issues/deficiencies raised by the Team from the COA-ITAO reports are found to be disadvantageous to PhilHealth’s interest in particular and the government in general; and can be considered an improper utilization of funds,” the COA said.
The seven project titles identified in the report were “1 Lot Upgrade of Network Equipment for PhilHealth Regional Offices” with a contract price of P74.3 million; “Delivery and installation of 1 Lot Redundancy for Production Database Server” (P19.6 million); “Supply, Delivery, and Installation of IP-PBX for Various PROs” (P18.7 million); “1 Lot Additional Virtualization Software Licenses” (P14.5 million); “1 Lot Integrated Security Suite” (P13.9 million); “1 Lot Redundancy ISP for PhilHealth Online Services for Two Years” (P10 million), and ”1 Lot Wireless Network Enhancements” (P2 million).
The suppliers for the projects were not identified in the audit report.
The COA acknowledged that the PhilHealth management recently submitted supporting documents and written justifications to answer the issues raised by the IT auditors. The state auditor said the documents would be forwarded to ITAO for evaluation and verification.
“Also, the audit team will continuously monitor the compliance of the winning bidders on the required technical specifications of the ICT contracts,” the COA added.
Meanwhile, in the same audit report, the COA reminded PhilHealth to settle its audit suspensions and disallowances, which, as of Dec. 31 last year, have already amounted to P84.36 million and P6.88 billion, respectively.
The COA issues a Notice of Suspension to give the concerned official or government agency the opportunity to justify the questioned transaction. If the COA is not satisfied with the justification, it would then issue a Notice of Disallowance to compel the return of the disbursed amount.
The COA’s breakdown showed that as of the end of 2019, the PhilHealth head office has unsettled disallowances totaling P1.3 billion, followed by PhilHealth National Capital Region (NCR) with P599 million, Region 6 with P542.9 million and Region 3 with P542.5 million.
Other PhilHealth regional offices with huge amounts of disallowances were Region 10 (P471 million), Region 5 (P423 million), Region 4-B (P358.8 million), Caraga (P347.8 million), Region 11 (P309 million) and Region 2 (P307 million).