COA: DICT Purchased Laptops, Tablets While OWWA Got Hygiene Kits, Sanitary Napkins From Different Construction Firms

The Commission on Audit (COA) has flagged the Department of Information and Communications Technology (DICT) over its purchase of laptops, tablets and pocket Wi-Fi devices amounting P170.273 million from a questionable firm registered as engaged in general construction.

In its 2020 annual audit report, the COA noted that the DICT bought a total of 1,000 laptop computers, 26,500 tablets and 1,001 pocket Wi-Fi  devices from Lex-Mar General Merchandise and Contractor.

The COA noted that the firm was listed in the Bureau of Internal Revenue (BIR) as engaged “in the business of general construction.”

“Here, there is no showing both in Lex-Mar’s BIR certificate of registration and permit to operate that it is engaged in the business of supply and delivery of ICT devices such as laptops, tablets and pocket WiFi,” COA said. “Hence, it is doubtful whether the herein supplier has the legal capacity to engage in this kind of (ICT supply) business.”

Furthermore, the COA noted that Lex-Mar’s current listed assets was only at P44,578,450 as of December 2019, about four times the value of the contract awarded by DICT, saying this cast doubt on the firm’s financial capacity to carry out the supply project.

It said there was also no document submitted showing that Lex-Mar, a sole proprietorship firm, had previously engaged in the ICT device supply business.

Based on the audit body’s record, the items were bought by DICT under negotiated procurement by virtue of two department circulars issued in June 2020.

The identified beneficiaries of the devices were the students and teachers in public schools in San Juan City and Makati City, supposedly as part of the DICT’s COVID response projects.

It was not explained in the audit report why the DICT specifically chose the city governments of San Juan and Makati, which are both considered as rich local government units.

Nonetheless, the COA said the transaction was outside the DICT’s mandate which is limited to “formulating and implementing policies and initiatives.”

“The DICT’s mandate of formulating and implementing policies and initiatives does not include the authority of providing ICT devices to the intended beneficiaries,” the COA said.

“Hence, while we sympathize with the plight of learners and teachers in this time of distance learning or online classes, a donation of government property, such as in this case, may be considered as illegal expenditure,” it added.

The COA has required the DICT to submit an explanation “as to why the contract was awarded to a supplier with doubtful technical, legal, and financial capacity.”

COA to OWWA: Why buy hygiene kits, sanitary napkins from construction firm?

The COA also questioned the Overseas Workers Welfare Administration (OWWA) as state auditors found deficiencies in the agency’s expenditures for 2020.

In COA’s 2020 audit report for the OWWA, it was stated that a OWWA-Central Office deputy administrator purchased P1.269 million worth of hygiene kits, snacks and bottled water from a “construction and trading store/supplier, which are not procured from reputable drugstores and supermarkets.”

The COA also found that of the P1.269 million, P969,920 of hygiene kits, sanitary napkins and thermal scanners were procured from a certain store, MRCJP Construction and Trading supposedly in Pasay City.

Apart from this, state auditors noted that OWWA bought hygiene kits at P160 per piece – which were not itemized – and sanitary napkins costing at P10 to P30 each, with the COA that one piece “can be bought at sari-sari stores at P5 to P8 per piece.”

OWWA also bought thermal scanners with a price of P2,950 each, but the COA said that based on internet prices, one device would only range from P400 to P800.

COA then asked OWWA why it would buy bulks of hygiene kits, sanitary napkins and thermal scanners from a construction firm when a local drugstore is near the agency’s central office in Pasay City.

P300,000 for snacks?

The COA also flagged the OWWA for its purchase of bottled water and several snacks for P300,000 from a certain caterer  with address in Tandang Sora, Quezon City, when these items can be bought in supermarkets near the OWWA’s central office.

In between the periods of May 1 to May 10, 2020, the COA noted that OWWA bought a thousand pieces of bottled water, several ensaymada (a type of bread) and cupcakes from the caterer, having a total of P30,000 per purchase.

State auditors then recommended that the OWWA-Central Office deputy administrator be required to justify why the transactions were made from a construction and trading company and to a caterer instead of a supermarket and local drugstore, and to “show proof on the reasonableness of the prices of the procured items.”

COA auditors also recommended that the deputy administrator to “submit an itemized list of the procured items with the unit prices indicated therein,” and to “compel the suppliers of goods and services to issue sales invoice/[official receipts] on the said transaction.”

‘Not yet final’

In response to the report, OWWA administrator Hans Leo Cacdac said, in a letter dated Wednesday, Aug. 18 that the COA finding “is not yet final.”

Cacdac also named the deputy administrator in the report, Faustino Sabarez III, who he said, “headed our ground operations at the height of the enhanced community quarantine in March to June 2020.”

He said the deputy administrator “is given a chance to explain his side and liquidate his cash advance.”

“The amount of P1.2 million for the purchase of operations-related supplies was not sourced from the OWWA Trust Fund, but the General Appropriations Act,” Cacdac explained.

He then asked for the public’s “patience and understanding” as OWWA will go through the process of explaining to COA about the purchase, and also cleared controversial OWWA deputy administrator Mocha Uson from the issue.