MANILA, Philippines — The Commission on Audit (COA) has flagged the P3.14-billion Land Transportation Management System (LTMS) project of the Land Transportation Office (LTO) over delays in the implementation of the program, despite full payments for core applications and at least 15 contract extensions.
COA has warned that the incomplete foreign-assisted project could lead to the wastage of government funds if unresolved.
The LTMS was developed by the Joint Venture Agreement of German technology firm Dermalog and its local partners: Holy Family Printing Corp., Microgenesis and Verzontal Builders Inc. – after the project was awarded in May 2018 through competitive bidding. It has been repeatedly flagged by the COA for three consecutive years due to delays.
In the 2022 report, COA stressed that the LTMS was not completely utilized despite full acceptance and payment due to some missing functions, processes and other implementation issues.
The COA added that the missing processes of the LTMS were deemed necessary by the users of the system, citing for example the absentee and overseas Filipino workers’ driver’s license renewal under the Driver’s Licensing System.
It also directed the LTO to substantiate the basis of the 25 percent and 22 percent payment on the software and licenses for the maintenance of core applications.
“We recommended, and management of LTO agreed, to give complete dedication and commitment to fully implement, utilize and closely monitor the Land Transportation Management System project, and ensure the completion of all the necessary functions/processes of the seven core applications based on its timeline to avoid any further delays, and the additional computer IT fees being paid by the general public in using the old IT system,” COA said.
COA added that the LTO should also ensure that payments for the maintenance of core applications are made only for the accepted core applications, and that any payments made ahead of time are recovered or applied to the subsequent billing.
It also directed the LTO to substantiate the basis of the 25 percent and 22 percent payment on the software and licenses for the maintenance of core applications.
The COA added the details of the actual accomplishment works provided by Dermalog for the maintenance of core applications claimed under the database software and software monitoring, amounting to P94 million, should be submitted.
“Demand the return and/or offset in the subsequent billings and/or payment to Dermalog the total amount of P13,042,145.54 comprised of P4,912,142.86 that has been paid under the maintenance of core applications that should have been under the data center; and P8,130,002.68 for the excessive payment made for the electricity fee. Henceforth, ensure that Dermalog shall not include electricity fee on the maintenance of the data center on their succeeding claims to avoid inadvertent payment thereof which may result in disallowance in audit,” COA said.
The COA report added that the LTO should provide the audit team with the status of the actions of agency’s legal team on the issue of source code and ensure strict compliance with the agreed terms ofcontract.