COA says: City Hall purchased “eaxpensive” drugs

CEBU, Philippines - The Commission on Audit has found that Cebu City government incurred unnecessary expenses when it purchased millions worth of assorted drugs and medicines at higher prices.

The state auditors conducted a random audit to some of the city's financial transactions amounting to P2,323,002 and discovered that the cost is much higher by P1,637,343 as such drugs and medicines can be purchased at only P685,658 in pharmacies managed by the Department of Health.

 COA claimed that the transactions be considered "disadvantageous" to the government because instead of realizing savings of P1.6 million in public funds, the city incurred an unnecessary expense with no economic benefits obtained out of the contracts.

 DOH manages a pharmacy that serves as a wholesale and distribution hub of low cost and quality medicines for organizational entities with duly established retail drugstore or hospital pharmacies managed by local government units, Botika sa Barangay, drugstores operated by cooperatives and community-based organizations.

According to COA, although some of the medicines needed by the city may not be available in the DOH pharmacy, as it only sells items listed in the Philippine National Drug Formulatory, it is still advantageous to procure considering the price disparity.

With the creation of government pharmacies nationwide, procuring government institutions, particularly the LGUs, are one of the targeted beneficiaries and they can be allowed to use the direct contracting mode of procurement as provided for by Republic Act 9184.

But the state auditors observed that the city did not make use of such government drugstores when it instead purchased from private suppliers at higher prices.

"This condition seemed to give undue favor to certain suppliers and did not benefit the city," the state auditors said in its Annual Audit Report (AAR) for the city's financial transactions last year.

 The city officials explained that Bids and Awards Committee (BAC) for Goods and Services has conducted a public bidding in compliance to the provisions of the Implementing Rules and Regulations of the Government Procurement Act. They also believed that the government-owned retail pharmacies could cater to the city's needs.

Nevertheless, the executive officials assured that starting this year, they will try to comply with the state auditors' recommendations.

The city has allocated P20 million for its City Hospitalization Assistance and Medicine Program (CHAMP) by providing up to P5,000 worth of drugs and medicines to each of the poor city resident. —  (FREEMAN)