COA suspends audit vs P10.3M fountain project

Mayor Gomez, others asked to explain

ORMOC CITY, Philippines — The Commission on Audit (COA) has questioned the disbursement of P10.3-million fund for the supply and installation of multi-pattern modular fountains in front of the old City Hall and Public Plaza.

COA issued on February 5 a notice of suspension (no. 18-001-100-17) of audit against the contract amount and required Mayor Richard Gomez, 18 other city officials, and the supplier to submit documents — within 90 days — that would support the legality of the project and its fund, otherwise a notice of disallowance will be issued against them.

COA, in its notice of suspension, stated that it was issued because of the following reasons:

1) The city officials allowed the supplier, Industron Incorporated, "to conduct a demonstration of three fountains on October 20, 2016 and November 5, 2016," even if the fountains were "already on going" and done before "the deadline for submission and opening of bids on Nov. 8, 2016."

COA also said that Industron's request for demonstration (in a letter dated Sept. 5, 2016) was "made even before the appropriation ordinance was enacted and approved by the city mayor; before the invitation to bid was published and posted; before the bidding documents were available to the public; and before the supplier submitted his bid for the project."

COA stated that it showed that Industron, sole bidder of the project, "was a pre-identified supplier with prior knowledge of the items to be procured" by the city government, contrary to prevailing laws on government procurement (Republic Act 9184).

2) The minutes of the pre-procurement and pre-bid conferences, and opening of bids — as required by law — confirming that the procurement processes were undertaken by the bids and awards committee, "were not among the bidding documents submitted to the audit team;"

3) The COA also found that "no signboard was set up at the project site to inform the public of the on-going project of the city," and that the areas were "cordoned off and covered entirely from public view," with only the "signboard for civil works... was visible;" and

4) Appropriation Ordinace No. 2016-003, "approving the supplemental budget of P14 million as source of fund for the fountains, was enacted by the City Council only on Sept. 14, 2016," ahead of the program of works and estimates — issued on Sept. 20 and 21, 2016 — that could have been the basis for approving the requested amount.

COA concluded that "it is not clear how the amount of P14 million was arrived at, as basis of the supplemental budget," as approved by the Council.

Based on this findings, COA required Mayor Gomez and 19 others "to submit documents to facilitate evaluation by the audit team on the regularity, legality and validity of the procurement made by the LGU."

Among the explanations required were on: "why the supplier had prior knowledge of the intended procurement; why the supplier was allowed to demonstrate its product before the bidding; basis for the appropriation of P14 million supplemental budget; and authority of the city administrator to approve the payment to Industron, in its disbursement voucher."

Besides Mayor Gomez, others who were required to comply COA requirements are: Vice Mayor Leo Carmelo Locsin Jr.; Councilors Rolando Villasencio, Mario Rodriguez, Benjamin Pongos Jr.; Eusebio Gerardo Penserga; Gregorio Yrastorza III; Nolito Quilang; John Eulalio Nepomuceno Aparis II; Lea Doris Villar, and Mariano Corro;

Also included are OIC City Accountant Rosario Serafica; City Administrator and BAC chair Vincent Emnas; BAC vice chair Domardoni Cayanong; members Ledita Alterado, Emilio Tingson, and Yvonne Fe delos Santos; City Engineer Ranulfo Oliveros, German Dixton Canezo of the BAC-Technical Working Group, and Industron representative Maybelle de Leon.

Before the notice of suspension, the COA said it already released its annual audit report for 2016 and informed Mayor Gomez about the questioned items on its audit observation memo.

The mayor, who is now in Manila, and the other city officials have yet to issue their side of the matter. (FREEMAN)