What COA flagged in DOH's handling of billions in COVID-19 funds
MANILA, Philippines — Heavy numbers are ahead in this story. And for the millions affected by the coronavirus crisis in the Philippines, they may be disheartening.
The Commission on Audit has released its report on the Department of Health's COVID-19 spending last year. The audit report looked into unutilized funds, deficiencies in procurement and the unauthorized grant of meal allowances.
Overall, the deficiencies by end of 2020 stood at P66.28 billion. Further auditing revealed P1.036 billion more of that, to bring the total to P67.32 billion.
It said these helped abet problems in the agency's pandemic response in one of Southeast Asia's worst virus outbreaks.
Fund utilization
COA said it found "considerable amounts" — P11.89 billion as of December 31, 2020 — of unobligated funds in the DOH. The allotments were intended to improve the agency's capacity to address the ongoing health crisis, and to reinforce the country's health care system.
Auditors recommended that Health Secretary Francisco Duque III remind heads of operating units, hospitals, and other facilities, to "act with urgency and efficiency" in using funds allocated to the department.
The DOH, in response, vowed to direct concerned officials to address challenges and roadblocks slowing down the efficient use of the funds.
It sought to explain that a huge percentage of the unutilized balance is from the "Bayanihan 2" law, which includes allocations for health workers' special risk allowance and hazard pay, among others. DOH said it only received the funds by October 30, 2020.
Foreign-assisted projects
Auditors also said accomplishment targets for the rollout of foreign-assisted projects, amounting to P3.42 billion, were not met by end-2020.
COA called to hasten the procurement through proper planning, supervision, and monitoring of scheduled activities.
DOH said its project Healthy and Active Lungs (HEAL) with USAID had a P2-billion allotment. Of that, more than P479 million were used for 90 units of mechanical ventilators, 85 X-ray machines and for the renumeration of project staff from November to December 2020.
But health officials said other activities were not done in that year as the project only began in November, and were carried over to 2021. "This issue is not only on the non-accomplishment of targets," COA said in reply, "there are lives of the Filipino people that need to be saved in this time of state emergency."
Procurement deficiencies
COA also flagged DOH for deficiencies in the procurement process and lack of documentation in a number of contracts.
The commission said these amounted to P5.038 billion, and were not aligned with provisions of the Government Procurement Reform Act. It added this "deprived government of the most advantageous prices, and cast doubt on the regularity in the payment of transactions."
The deficiencies include:
- P611.24 million - defects in Omnibus Sworn Statements involving procurement contracts
- P1.88 billion - deficiencies in posting of procurement information involving contracts
- P994.51 million - incomplete submission of documentary requirements for contracts
- P619.05 million - procurement of goods and services sans warranty clause
- P611.24 million - defects in Omnibus Sworn Statements involving procurement contracts
- P401.35 million - non-provision of adequate technical specifications in contract documents involving procurement contracts
- P194.40 million - procurement disadvantageous to government
- P130.12 million - non-preparation of updated annual procurement plans and defects in it for procurements
- P81.43 million - inappropriate mode of procurement for contracts
- P10.46 million - procurement of Critical Supplies and Equipment outside DBM's procurement service without Certificate of Non-availability of Stocks
COA also flagged P74.43 million for medical equipment and supplies for COVID-19 response: P69.94 million unutilized due to factors from lack of proper procurement planning, and liquidated damages at P4.49 million.
Auditors called for a thorough probe into the irregularities as well as proper sanctions when needed.
Handling petty cash funds
Auditors said cash advances and petty cash by various DOH operating units for COVID-19 response amounted to P98.40 million.
The auditing body said such were against existing laws, and urged DOH to tap its legal service and internal audit services to investigate the handling of the money.
Fund transfers
Funds sent to procurement partners or implementing agencies without memoranda of agreement and other supported documents was at P42.41 billion.
COA also noted delays in the delivery of needed medical equipment and supplies, resulting in "delays in the provision of quality health service during the challenging times of the pandemic."
Financial assistance programs
The commission said some P4.88 million worth of claims from financial aid beneficiaries were not paid by end-2020.
It said the aim of the financial aid, to cushion the impact of the pandemic on both private and public health workers, was not fully attained because of this.
COA urged the DOH to require its Financial Management Service and Accounting Division to explain the delay.
COVID-19 allowances
DOH's non-compliance with rules on the grant of COVID-19 allowances resulted in paying P539.29 million to health workers without complete documents, COA said.
That included P214 million to unqualified recipients, overpayment of P6.49 million and the payment of P54.45 million during periods not covered by the Enhanced Community Quarantine.
In total, the amount was at P814.24 million.
Unauthorized meal allowances
COA also flagged P275.90 million worth of meal allowances to operating unit personnel through cash allowances, gift certificates and grocery items.
It noted that such were charged out of funds supposedly for life insurance, accommodations and transportation.
The commission said it was inconsistent with the Bayanihan to Heal as One law, "defeats the purpose of the funds, and lacks sufficient legal basis."
Heads of operating units were urged to refund meal allowances that were given sans legal basis.
Documents incomplete for death, sickness pay
The health department also paid out P11.66 million in death and sickness compensations despite deficient or non-existent supporting documents, auditors said.
COA said that was against existing rules, and made the transactions' validity and regularity "highly doubtful."
COVID-19 in-kind donations
The commission said some P1.40 billion worth of donations in-kind were not properly accounted for by the DOH.
It attributed it to failure to prepare and submit the required summary or list of donations received, distributed, and balances of COVID-19-related donations and other necessary documents.
Managing Interim Reimbursement Mechanism funds
COA noted lapses in the DOH's management of funds for the Interim Reimbursement Mechanism, amounting to P734.5 million, by state-run health care institutions.
The body said it was "counter-beneficial to government's thrust of providing quick relief to medical facilities" during the pandemic.
Duque: No funds were stolen
Health Secretary Duque, in response to the report, maintained the P67.32 billion has been accounted for.
By end of 2020, he said, P68.9 billion out of the P79.7 billion the agency received had already been utilized.
"No funds were mishandled and all were alloted for our people" he added in Filipino, "Rest assured that the funds alloted to DOH are all spent for the procurement of test kits, PPEs, payment of HCWs' benefits, salaries among others."
Duque added that extension of the 'Bayanihan 2' law allowed the DOH to utilize the unobligated funds for this year.
"We take our COA findings very seriously and have been working to further improve our processes and controls so that we can serve the public most effectively especially during this pandemic," he said.
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