‘Surgical Masks, Face Shields Worth Over P95 Million Idle In Depots’

The Commission on Audit (COA) has called out the Procurement Service-Department of Budget and Management for its purchase of surgical masks and face shields worth P95.46 million that remain idle in its depots.

In its 2020 annual audit report on the PS-DBM, the COA noted that from April to May 2020, the PS-DBM entered into contracts with various private suppliers for bulk orders of surgical masks and face shields to meet the demands of its client government agencies.

The COA said as supply was still scarce at the time, the items were procured by PS-DBM at very high prices ranging from P16 to P27.72 per piece of surgical mask and P120 per piece of face shield.

The COA's breakdown showed that a total of 13.95 million pieces of surgical masks and 1.317 million pieces of face shields were procured by the PS-DBM.

The COA said while the items were delivered to the main office of PS as early as May 2020, they were not immediately delivered to the regional depots (RDs) to be sold to government agencies.

The COA reported that the items remained undelivered to the RDs until the market prices already went down and with the Department of Health (DOH) issuing a revised suggested retail price (SRP) on Sept. 9, 2020, setting a price cap of P2 to P4 per piece of surgical mask and P26 to P50 per piece of face shield.

The audit body said because of this, majority of the government agencies no longer wanted to purchase the items from PS-DBM, unless they will be sold at discounted prices.

The COA noted that as of Dec. 31, 2020, there were 2,529,700 pieces of surgical masks and 483,333 pieces of face shields that remain unsold and idle at the PS-DBM main depot while 230,867 pieces of surgical masks and 1,569 pieces of face shields remain at various RDs. The idle items amounted to P95.46 million, the COA said.

“If PS had delivered all of the items when the demand was high, these items could have been sold immediately at a selling price at par in the market in the total amount of P99.274 million,” the COA said.

“From May 2020 to September 2020, the PS had the opportunity to sell [the] items at par in the market, yet these items remained unsold at the end of the year. More than the income generated, the PS could have served fellow government employees/healthcare workers through the delivery and sale of these items during the time these were badly/urgently needed,” it added.

The COA noted that various RDs even wrote letters to the PS-DBM inquiring about the permitted discounts so that the items can still be sold, albeit at lower prices.

“However, it was reported that no reply was received by them (RDs),” the COA said.

“Interview statements of Marketing and Sales Division (MSD) also revealed the absence of policy in place to clearly execute the range of discount the PS may offer, and has not monitored the fluctuation of selling prices in the market,” the COA added.

Meanwhile at the hearing at the House of Representatives last Tuesday, Aug. 17, it was revealed that bulk of the COVID-related procurements of the DOH, flagged by COA in its audit report, involve transactions with PS-DBM.

The DOH confirmed that out of its P42.41 billion in fund transfers flagged by COA due to lack of memoranda of agreement (MOAs) and other supporting documents, P41.4 billion pertains to payments to PS-DBM for various common-use supplies and equipment.

"Upon consultation with the PS-DBM, which we did last week, we inquired if indeed MOA is required, we got a reply stating that pursuant to their policies, a MOA is not required in the procurements concerning common use supplies and equipment," DOH's procurement director Paul Guimbarda told the House committee on public accounts during the hearing.