CEBU, Philippines - The Commission on Audit has uncovered irregularity in the transaction of the Cebu Port Authority (CPA) when the port officials purchased some fire equipment without conducting the required competitive public bidding.
The questionable transaction involved the purchase of P1.1 million-worth of fire alarm systems, smoke detectors and automatic suppression system, split the requisitions and purchase orders to make it appear that the transactions are aboveboard.
COA-7 director Delfin Aguilar said state auditors who reviewed the financial transactions of CPA are so alert to notice the illegal transactions that violated the provisions of the state audit procedures.
Section 54.1 of the Implementing Rules and Regulations (IRR) of Republic Act 9184 or the Government Procurement Act provides that “Splitting of Government Contracts is not allowed.”
Splitting of government contracts means the division or breaking up of government contracts into smaller quantities and amounts for the purpose of evading or circumventing the requirements of the law, Aguilar explained.
The records showed that CPA officials spent P1,183,975 in 2009 for the installation of fire alarm system, smoke detectors and automatic suppression system at their main office and some selected terminals in compliance with the Fire Code.
The procurement was done in two batches, the first set of request consisted of four separate requisitions and issue vouchers (RIV) although it was prepared on the same day on December 16, 2008. While the second set of procurement, which was made on three RIV’s was also done on the same day on July 1, 2009.
“Taking individually, each transaction may appear to be regular, but when considered in groups, it clearly showed splitting of accounts prohibited by COA rules and of the provisions of the Procurement Act,” Aguilar explained.
Although direct shopping can be also made in case of “highly exceptional cases” as provided for by the law, Aguilar said in this particular transactions of CPA, there were no justifiable reasons that would warrant the application of procurement through shopping.
During the exit conference of the state auditors at the CPA, the port officials have acknowledged the deficiency and assured to rectify it. CPA officials said they have already directed the supply officer, including the department managers, to strictly comply with the provisions of the Procurement Law. (FREEMAN)