COA scores Bogo’s frequent shopping

CEBU, Philippines - The Commission on Audit has noted that “shopping” was frequently used in the procurement of goods and services in the City Government of Bogo due to the absence of an Annual Procurement Plan in violation of Republic Act 9184.

Moreover, COA in its 2012 audit report said that payments for goods and services amounting to P1.3 million were in the name of City employees in violation of Presidential Decree No. 1445 and also deprived the government from the appropriate taxes due thereon.

Section 52 of RA 9184 states that “Shopping” is a method of procurement employed only when there is an unforeseen contingency requiring immediate purchase, provided, however, that the amount shall not exceed P50,000.

It also provides that procurement of ordinary or regular office supplies and equipment not available in the Procurement Service involving an amount not exceeding P250,000, provided, however, that the procurement does not result in splitting of contracts.

In its audit of disbursements for 2012, COA observed that shopping was the primary mode of procurement of the City while bidding was done only on selective basis.

“Purchases were not consolidated thus, depriving the LGU from the huge discounts had these been purchased in bulk.  Likewise, the manner of procurement also entailed more time, effort and expenses because the preparation of these vouchers and their supporting documents were made by each department,” the audit report said.

COA said that due to the absence of the Annual Procurement Plan, the City always resorted to shopping as a primary mode of procurement.

It also observed that payees in the disbursement vouchers and checks for the purchase of supplies and materials were in the name of some City employees instead that of the suppliers.

It was noted that payments were done on reimbursement basis or withdrawal of cash advance.

COA said the practice may result to misappropriation or non-payment to the supplier.

In response to COA’s Audit Observation Memorandum, the Bids and Awards Committee (BAC) informed the Audit Team that the City had already prepared the 2013 Annual Procurement Plan to avoid the occurrence of the same problems in the future.

COA recommended that management advise the BAC to minimize the practice of procuring goods and services by “shopping” saying that bidding should be the primary mode of procurement in compliance with RA 9184.

The different department heads should prepare and submit their individual PPMP to the BAC for consolidation.

The BAC through the BAC Secretariat shall prepare the Annual Procurement Plan (APP) to guide the agency in the procurement of goods and services.  Hence, procurement of goods and services by shopping could be minimized.

COA further recommended that management shall draw check payments directly in the name of the supplier in conformity with existing regulations and withhold the appropriate taxes due the government. — (FREEMAN)