Talisay told to ask P1M supplier refund, COA: Vehicle deal extravagant

CEBU, Philippines - A nearly P3.5 million purchase of rescue and emergency vehicle made by the Talisay City government was "excessive," an examination by the Commission on Audit found.

In its audit observation memorandum report, the agency said the city government spent an excess of P780,000 representing the excessive contract cost of the rescue motor vehicle from the supplier and P175,000 advance payment for lifetime warranty on service and parts.

"The payment was found to be 32.20 percent above COA estimate, thus considered excessive expenditure, which is prejudicial to the interest of the government," said the three-page report addressed to Mayor Johnny De los Reyes.

The report was signed by state auditor Ma. Daisy Bercede and officer-in-charge supervising auditor Cymbeline Celia Chiong-Uy.

Last January, a COA specialist, along with the representative from the city engineering office, inspected the brand new unit model JAC stallion 4x4 pick-up with outboard motor and rubber boat and other rescue equipment from the D' Limitless Vehicle Ventures Corporation.

The COA then made a price evaluation of the motor vehicle and its accessories based on the canvass made with similar make such as Toyota Hi-Lux and with an even higher engine displacement. It was found out that the cost was above COA cost evaluation and considered excessive.

Also, the P175,000 representing the advance payment for lifetime warranty on service and parts is not allowable, according to COA, citing that the vehicle is still covered with warranty.

"We recommend that management collect the amount of  P780,000  excessive contract costs of the motor vehicle from the supplier and the  P175,000 advance payment for lifetime warranty on service," the report read.

If the city fails to follow their recommendation, the COA said the amount will be disallowed in audit and the person who approved such payment shall be held liable.

Aside from demanding a refund, the COA also urged the city government to exercise diligence in the performance of their functions to avoid paying excessive contract cost.

But in a letter reply to COA, Mayor De los Reyes said the purchase of the motor vehicle was not excessive.

The mayor furnished COA the itemized details on the P3.5-million vehicle intended for the Disaster Risk Reduction Management Office.

De los Reyes explained the vehicle is primarily designed to provide specialized equipment and accessories necessary for technical rescue situations.

De los Reyes added that the purchase includes the LTO registrations for three years, lifetime services, spare tire replacement, fuel charges, including the staff orientation in quarterly basis. (FREEMAN)