NFA let Cavite, Ilocos retailers withdraw rice above allocations — COA

The National Food Authority allowed its retailers in Cavite, Ilocos Sur, and Ilocos Norte to withdraw bags of rice way above their weekly allocations, resulting in uneven rice distribution, the Commission on Audit said in its 2017 audit report.

The COA mentioned the NFA's Cavite Provincial Office, the offices in Ilocos Norte and Ilocos Sur, and the Northern District Office (NDO) as not complying with NFA SOP No. GM-DN09.

“The maximum weekly rice allocation to retailers…was not properly observed in NDO, CPO and two POs in RO No. 1, resulting in unequitable rice distribution, thereby defeating the intention of the allocation system and giving undue advantage to selected retailers which could lead to diversion of stocks,” state auditors said.

The NFA had devised an allocation system ensuring that NFA rice is distributed proportionately to the consuming public. This computation is based on NFA stock position, prevailing market supply and demand, NFA distribution program, projected requirements per area, and retailer's declared capitalization.

The COA said 17 retailers in Ilocos Norte had the highest excess withdrawals at 24,495 bags compared to their weekly allocation of only 7,105 bags.

COA figures show one retailer, with the initials "SM," with a 1,000-percent excess in its rice withdrawals: it received 5,772 rice bags when its weekly allocation was supposed to be 477 bags for the period April to December 2017.

The COA said NFA-Ilocos Norte has informed the audit team that weekly rice allocation is only a guide for suppliers and can be revised any time, thus allowing retailers to withdraw rice in excess of their schedules.

In Ilocos Sur, the COA said 19 retailers received an excess of 3,009 bags of rice between October to December last year.

"The grant of excess allocations to selected retailers resulted in unequitable rice distribution, thereby defeating the intention of the allocation system and giving undue advantage to these retailers which could lead to diversion of stocks," the commission said.

Cavite and NDO retailers, meanwhile, withdrew an excess of 14,936 bags and 6,595 bags, respectively.

The COA recommended that the NFA offices named in the audit strictly adhere to the NFA SOP on the selling/distribution of NFA rice and stop the practice of granting excess allocations to retailers.

In its comment, the Cavite office said increasing the weekly allocation of accredited rice retailers can stabilize the supply and prices of commercial rice in the market. The COA, however, said this should be properly authorized, documented and evaluated.

The NDO said retailer capitalization and selling price cereals were used as basis for determining the weekly payment of retailers, hence the excess allocation, but COA said the NFA SOP is meant to determine rice quantity and not control payments.

The Ilocos Norte office, meanwhile, said it will adhere to the COA recommendations but said the weekly allocations only serve as a guide and not a quota for retailers.

The NFA-Ilocos Sur gave no comment in the audit. — BM, GMA News