The Philippine Navy (PN) on Sunday said it has stopped the transfer of funds to the Philippine International Trading Corportion (PITC), which the Commission on Audit (COA) flagged as an ineffective outsourcing agreement.
"Upon assumption of the FOIC (Flag Officer in Command), PN on December 2017, he took cognisance of such huge fund balance and gave directive to facilitate the implementation of affected projects," the Navy said in an emailed statement.
"Moreover, the FOIC, PN gave specific instruction not to transfer any funds to PITC during his term," it added.
The statement came after the COA deemed as "ineffective" the Navy's outsourcing of supply and services to the PITC, with non-implementation or delayed procedures resulting in accumulated fund transfers totaling P2.267 billion.
According to COA, the agreement deprived the Navy of the immediate use of the planned projects, which may have hindered the attainment of its mission.
With this, state auditors recommended that the Navy demand from the PITC the immediate delivery of all requisitioned goods and equipment, else request the refund of unspent balances and remit the amount to the Bureau of the Treasury (BTr).
In response, the Navy said its Bids and Awards Committee 1 (PN BAC 1) was activated to cater to the programs, activities, and projects (PAPs), while the PN BAC 2 was tasked to ensure the immediate implementation for calendar year 2019.
"For CY 2018 and CY2019 PN budgets, not a single centavo was transferred to PITC," it said.
"As of this date, there is a significant decrease of the remaining fund balance for PN unimplemented projects at PITC in the amount of P639M. This remaining fund balance must be utilized before the end of the year," it elaborated.
Looking ahead, the Navy said it has already taken note of the findings of the COA, specifically through the Office of the Naval Internal Auditor.
"[T]he PN intends a worthwhile, advantageous, and strategic use of public funds entrusted to the organisation as it perform its mandates to protect and secure the country and its people," it said.
"It has always been the thrust of the Command leadership to have zero tolerance top graft and corruption and have a transparent procurement system with checks and balances that will not delay the entire process," said the Navy. — Jon Viktor D. Cabuenas/BM, GMA News