COA questions OPAPP’s use of P45M worth of car rental services in 2014

The Commission on Audit has questioned the Office of the Presidential Adviser on the Peace Process' use of rental vehicles in 2014 amounting to P45,327,718 allegedly without the necessary authorization and with dubious supporting documents.

Based on an annual audit report published recently by the COA on its website, the OPAPP, in 2014, had leased 294 vehicles, 89 of which were rented on a monthly basis. Two hundred five were rented on a “per activity” arrangement.

The COA said the rented vehicles were on top of the 56 units that the agency owned.

The COA said the number of vehicles rented by the agency “exceeded what is usual or proper” under COA Circular No. 2012-003 or the “Updated Guidelines for the Prevention and Disallowance of Irregular, Unnecessary, Excessive, Extravagant and Unconscionable Expenditures”.

“The numerous vehicles utilized by OPAPP on its day-to-day operations could be regarded as unconscionable and excessive under COA Circular No. 2012-003 dated October 29, 2012. We recommended that the management explain/justify the necessity of renting said 294 vehicles,” the report read.

The COA pointed out that based on OPAPP's approved budget under the 2014 General Appropriations Act (GAA), only P7.97 million was allocated by the Department of Budget and Management (DBM) for the agency's rental of motor vehicles.

The COA said that instead of observing the limit set by the DBM, the OPAPP's car rental expenditures exceeded by 469 percent, or by P37.36 million, the allocation for such services.

“We verified compliance of OPAPP to the above requirements and found that 89 motor vehicles rented on a monthly basis for CY 2014 were not covered by an authority from the DBM,” the COA report said.

“The necessity of renting 294 motor vehicles cannot be adequately established since the purposes or activities were not always indicated in the supporting documents. We likewise cannot determine the specific person using the rented vehicles because the end-users indicated in the contracts were in general,” the report added.

The COA said that to cover the budget shortfall for its car rental expenditure, the OPAPP channeled funds from the agency's other programs “without seeking the prior approval of the Department of Budget and Management” as required under under paragraphs 3.3 and 12 of the National Budget Circular No. 446 (1995).

The COA said that in two letters sent to the OPAPP on January 16 and February 23, 2015, state auditors directed the agency to submit records of all its vehicle rental transactions for 2014 but the OPAPP was only able to submit documents for 37 out of the 294 rented vehicles.

The documents submitted by the OPAPP were for 20 rented vehicles in Mindanao and 17 in Metro Manila.

Questionable documents

The COA further said that most of the documents submitted by COA proved to be questionable after state auditors made verifications with the data base of the Land Transportation Office.

“We confirmed the 20 rented vehicles provided by OPAPP to the regional auditors but received information on seven vehicles only in April 2014. Plate numbers UZZ 442 and PQU 222 for Toyota Fortuner and Mitsubishi Montero, respectively, were not yet manufactured as of the time of verification on April 1, 2015,” the COA pointed out.

The COA said the verification further revealed that some rental papers submitted by OPAPP differed with the official receipts/certificates of registration (OR/CR) in the LTO Main Office in Quezon City as well as in the LTO district offices.

The COA said that, for instance, based on the papers submitted by the OPAPP, a Toyota Grandia with plate number YB-6756 was rented in June 2014 from REIA Rent-a-car Services in Marikina City at P7,000 per day from 7 a.m. to 5 p.m. with an additional charge of P400 per hour beyond 5 p.m. However, records from the LTO regional office in Davao revealed that the said plate number was assigned to a motorcycle in Davao City.

In another document, the OPAPP said a Toyota Fortuner with plate number NDB-111 was rented from Barlo Enterprises at P75,000 a month but records from the LTO-Manila West Office showed the plate number is assigned to a 1978 Toyota Corona.

Based on the paper submitted by the OPAPP, a Hyundai Tucson with plate number TAU-692 was hired at P50,000 a month for 14 months, also with Barlo Enterprises. But the LTO Main Office said the vehicle is actually registered to an Isuzu dump truck.

The COA report said state auditors discovered that two other Toyota Fortuner SUVs, one from Barlo at P75,000 per month and another from Recoleta Car Rental at P65,000 a month were also found using plate numbers assigned to other vehicles with private owners.

“OPAPP entered into lease agreements with firms that were not into the business of renting motor vehicles or not registered with the DTI (Department of Trade and Industry) and car lease firms that sub-contracted their services to private individuals to the disadvantage of the government,” the report read.

The COA said further inquiries also revealed that the rented vehicles were “not registered with LTO in the name of the establishments or owners of the establishments contracted by OPAPP.” Instead, “all the vehicles rented out to OPAPP were registered to different private individuals”.

Already approved by DBM?

In a statement sent to GMA News Online via e-mail, OPAPP executive director Undersecretary Luisito Montalbo confirmed that the agency was furnished with a copy of the COA report on June 26, 2015 and that it has already responded “in detail” to the audit observations through a letter the office submitted to the Resident Auditor on July 27, 2015.

“We clarified [in the letter] the need for extensive vehicle rentals as OPAPP operates on a national scale, but has no regional offices nor facilities to address operational needs as necessitated by the substantive developments on the peace tables and on the ground,” Montalbo said.

“It may be noted that the rentals were not disallowed by COA, but what the memo recommended was to secure necessary DBM approval for the rentals. This we have complied with and received DBM approval on September 15, 2015,” Montalbo added. —NB, GMA News