COA flags doubtful purchases, fake bid documents made by Ilocos Norte gov’t

The Commission on Audit has flagged several anomalies in purchases made by the administration of Ilocos Norte Governor Imee Marcos, including the supposed failure to conduct an inventory for P125 million worth of supplies and the fabrication of bid documents for projects worth P21.76 million.

As of December 31, 2017, COA said, the Ilocos Norte government had a balance of P92.4 million for inventories up for distribution and P32.6 million for supplies held for distribution.

However, the true value of these balances could not be determined as the province's inventory custodian has not conducted a physical inventory, nor did he submit a Report of Physical Count of Inventories, COA said.

The COA said that the Local Government Code requires Marcos, who failed to form an inventory committee, to direct her custodian to have an inventory of its supplies every semester to ensure these will be delivered to their beneficiaries.

"Neglecting the periodic conduct of physical count of inventories and non-maintenance of necessary records, therefore, resulted [in] unreliable balances and doubtful existence and condition of inventories hence, affecting the fair presentation of financial statement," state auditors said in their annual audit report.

These supplies include medical and dental supplies, agricultural produce, educational materials, farm inputs, and office supplies.

The COA further said that the provincial government may have overstocked its supplies, thus violating COA rules which states that the purchase of supplies should only last for three months.

"Evidently, the inadequate planning of procurement of supplies and materials and the absence of periodic assessment of inventory of the management resulted [in] non-compliance with the required three months requirements volume of purchases," COA said.

In its recommendation, COA said the provincial government must create an inventory committee headed by Marcos, who will conduct a semestral inventory of supplies and observe its three-month requirement to prevent the wastage of public funds.

In its comment, the Ilocos Norte management said that the conduct of supplies inventory had started on June 30 and will be continued for every six months.

The provincial government also disputed the supposed overstocking, saying that the formula COA used was based on a prescribed formula and not on actual data. The COA, however, said its computations were based on Ilocos Norte's ledgers.

Branded purchases

The COA further questioned why the government had to identify brand names for the procurement of supplies and appliances worth P470,866, when the Government Procurement Reform Act clearly prohibits such references. The procurement law also states procurement projects must only include technical specifications.

The COA, however, said Ilocos Norte specified an Angle Grinder, four Carrier air-conditioners, and one iPad Mini 4 in its procurement plan.

"This practice resulted [in] limited competition since other suppliers of the same item but of different brand name can no longer participate in the procurement activity," COA said.

Ilocos Norte management argued that these brands were “reliable yet inexpensive," while other purchased items had no brand names.

Fake bid documents

COA also said that the Ilocos Norte provincial government fabricated invitation to bid (ITB) reference numbers in the Philippine Government Electronic Procurement System (PhilGEPS) for its procurement of medicines, tarpaulins, and construction materials in 2017 and 2016 worth a total amount of P21.76 million.

The COA said the ITB used by Ilocos Norte originated from other government agencies, resulting in "a clear manifestation of the fabrication of documents to support the disbursements/payments of the suppliers/contractors, thus affecting the legality" of the transactions.

Based on the transactions uncovered by COA, CN Medical Distributor seemed to have benefited the most from the fabricated bid documents when it received an P18.8-million payment for the supply of drugs and medicines for Ilocos Norte in 2016 alone.

Other firms named by COA include Dashma Computer System & Services, Shawin Konstrak Const. & Construction Supply, BF Merren Pharmaceuticals, and St Ruiz Agro Farm Supply & General Merchandise.

"The copies of ITBs presented in the preceding tables, which were believed to have been fabricated, further imply that there were no actual invitations made to prospective bidders for the aforementioned procurements made by the province which violated the above-cited provision, hence, transparency, efficiency and competitiveness were not achieved by the government," COA said.

The COA urged the Bids and Awards Committee, BAC Secretariat, and Technical Working Group to seriously perform their duties to ensure all procurement processes are valid.

The provincial government said it has launched an investigation into the alleged misrepresentation of bid documents, while concerned public officials may face the possibility of legal action.

Last year, the House of Representatives conducted an inquiry into Ilocos Norte's alleged fabrication of documents to facilitate the purchase of motor vehicles using its tobacco excise tax shares

Majority Leader and Ilocos Norte Representative Rodolfo Fariñas, who initiated the probe, said the resolution of the House Committee on Good Government and Public Accountability has been approved by the plenary and submitted to the Ombudsman for filing of criminal and administrative charges. — BM, GMA News