COA questions CTU’s P17M equipment buy

CEBU, Philippines - The Commission on Audit has cast doubt on the propriety and validity of the procurement of laboratory equipment worth P16.8 million by the Cebu Technological University Main Campus.

Of the total purchase, P7 million came from the Disbursement Acceleration Program of the Commission on Higher Education and the P9.8 million was the Special Trust Fund (STF).

In their 2013 audit report, state auditors also noted that the supplier incurred the penalty for liquidated damages totaling P739,680.83 for the delayed completion of deliveries, which rendered the program inoperative even up to now.

Through the initiative of CHED Central Office, the national government allotted under DAP, through the Department of Public Works and Highways, P3.059 billion for the implementation of high  impact and fast disbursing projects of State Universities and Colleges.

The allocation was in support of the administration’s thrust towards alleviating poverty and improving the countries competitiveness.

CTU-Main Campus and CHED-Manila entered into a memorandum of agreement for the release of the P7 million for the schools’ hospitality management and food services laboratory.

The project proposal for instructional equipment for the laboratory amounting to P7 million, supported with undated purchase request made by Dr. Godofredo Loremia, the school’s vice president for administration, was approved on September 7, 2012.

However, a resolution was passed on the same date overriding the proposed supply and installation of instructional equipment and changing the procurement category into an HRM laboratory furniture, fixtures, and equipments, with the additional budgetary requirement of P10 million.

The procurement was published and posted on October 13, 2012 with the approved budget of the contract amounting to P16.81 million, as stated in the invitation to bid.

Bidding was conducted on October 31, 2012 where only MARS Laboratory participated in and won the project for the same amount of P16.81 million, as approved by the Bids and Awards Committee.

The contract between CTU-Main Campus and MARS Laboratory was then signed on November 12, 2012, whereby a notice to proceed was issued on November 14, 2012 and received by the contractor five days later.

On November 29, 2012, the supplier requested for an extension of the date of project completion to March 15, 2013, and was given 60 to 70 days.

Records, however, revealed that of P7 million, only P6,998,240 was given to the CTU-Main Campus on September 5, 2012 and deposited under the STF on October 1, 2012.

COA noted that on October 31, 2012, the bidding documents showed that there was no available fund yet to support the P10 million budget, either from the General Fund or from the STF, since the Budget Utilization Request (BUR) for the availability of funds was only certified by Dr. Normita A. Mejala on March 14, 2013.

“To summarize, this office concluded that the bidding conducted on October 31, 2012 is a pre-arranged bidding that grossly violated the provisions of RA 9184,” COA said.

It said that it appeared bidding was actually a negotiated arrangement between CTU and the supplier since the invitation to bid has the same amount of P16.81 million that was awarded to the supplier.

The COA also said that the abstract of bids signed by the BAC chairman and its members on October 31, 2012 was not credible since the Technical Working Group finished the post-qualification only on November 5, 2012.

Per report dated March 13, 2013, the project’s inspection and acceptance reports were certified as “inspected, verified and complete” by Dr. Renissa Quiñones (inspector) and by Helen B. Mayol (property officer), respectively.  On the other hand, the Acknowledgement Receipt for Equipment  was received by Prof. Maria Gypsy Bohol on March 14, 2013.

A request for inspection from the technical inspector dated November 7, 2013 was forwarded to COA-7 to validate the actual procurement cost.

“Inspection has been conducted but validation of the cost and report of inspection has not been made by the technical inspector due to the absence of the documents required, per COA communication dated November 22, 2013,” state auditors said.

Last January 14, the concerned CTU officials submitted documents but they were found to be without the detailed estimate and therefore could not be used for of inspection and evaluation purposes.

In its own inspection, COA found two detailed estimates of P7 million for the hospitality management and food services laboratory and P9.81 million for the HRM laboratory furniture, fixtures, and equipment worth, which were disclosed as Phase 2 of the project, which were made to appear that they were lumped up in the October 31, 2012 bidding.

“Phase I and Phase 2 are only made or fabricated as an allegation to circumvent the provisions of RA 9184 or any other existing rules, laws and regulations in favor of the supplier, Marciano Laburada,” the COA said.

It also considered as “questionable and highly irregular” the voucher dated March 21, 2013 covering the payment, as the approval portion, which should have been signed by university president Bonifacio S. Villanueva, was signed by the school’s chief administrative officer Jerlito A. Letrondo, who was the BAC chairman.

The COA said such action by Letrondo, in his capacity as acting campus director upon the retirement of Dr. Ponciano Bontia, had no written authority issued by the university president.

“The violations committed by the university officials from the conditions of the MOA and contract, which constitute pre and post procurement, and payment stage including the extension of work duly approved by the BAC in two versions scheduling March 15, 2013 as the date of completion of works, the certification by the TWG on November 5, 2013, and the acceptance of the property officer on November 13, 2013, create doubts on the…genuineness/validity and existence of the items installed and delivered,” it said.

The COA also believed that reckoned on November 29, 2012, the date of the supplier’s request for extension up to the time the project was allegedly accepted on March 13, 2013, the project actually incurred delay, hence it is subject to a penalty for liquidated damages for 44 days.

At P16,810.928 per day, MARS Laboratory should have been fined P739,680.83, for which COA issued a notice of disallowance dated May 14, 2014.

The COA said that additional information gathered in the review of the documents revealed that on March 15, 2013, Laburada executed an authorization to Jennifer V. Enriquez, an employee of CTU and a BAC secretariat member, addressed to the CTU president, who also executed an order in favor of Enriquez, to receive the payment in the amount of P14.23 million from the CTU cashier.

“(It was) an act highly unethical for a University President of CTU showing financial and material interest in the transaction requiring approval from their office,” COA said.

COA also found out that the laboratory is not even functioning because the building where the equipment were installed lacked electrical connection. (The said deficiency of the newly constructed P59 million five-storey technology building with roof deck is also the subject of an Ombudsman inquiry.)

Because of what it discovered, the COA recommended that the release of the retention money amounting to P1.68 million should be withheld and deducted from the payment of the contract, unless payment of the liquidated damages totaling P739,680 has been settled or refunded.

The COA also ordered the stoppage of the school giving authority to job order university employees to sign documents pertaining to the school’s infrastructure projects, as the JO employee has no specific accountability towards the government. —/RHM (FREEMAN)