COA finds irregularities in AFP’s procurement of P68-M fuel for Yolanda ops

The Commission on Audit has found several irregularities in the Armed Forces of the Philippines’ (AFP) procurement of petroleum, oil and lubricant (POL) products amounting P68.65 million supposed to be for its relief and rescue operations after Typhoon Yolanda hit the country in November 2013.

“The regularity of the disbursement of P68,645,912.00 in the procurement of POL products out of the QRF (Quick Response Fund) could not be ascertained since the supporting documents were deficient and the mode of procurement used was not in accordance with the Memorandum of Agreement, contrary to Section 4.6 of P.D. 1445 (Government Auditing Code of the Philippines),” the COA said in a 2014 audit report published on its website on Wednesday.

According to the COA records, the amount used for POL purchase was part of the P118.65 million QRF transferred by the Office of the Civil Defense (OCD) to the AFP through a memorandum of agreement (MOA) signed between the two agencies in November 2013.

Based on the MOA, the transfer of the OCD’s QRF to the AFP was aimed at augmenting the military’s efforts in “providing rescue, recovery, relief, and rehabilitation to victims of Typhoon Yolanda.”

The COA said the transferred funds were comprised of OCD’s QRT for 2012 amounting P50 million and QRT for 2013 amounting P68,645,912.

The COA records show that the entire amount was transferred by OCD to AFP through a check dated Dec. 6, 2013. The AFP acknowledged receiving the check by issuing Receipt No. 1589058 dated Jan.  9, 2014.

The COA said that from the transferred amount, the AFP then issued four checks totaling P68,645,912, the exact amount of the OCD’s QRF for 2013 transferred to the military.

The records show that of the P68.645 million, P58,162,738.18 was deposited to Petron Corporation as “payment for POL products” while the balance was listed as “payment of withholding tax in favor of Petron Corp.”

The COA said that while the transaction was authorized under Resolution No. 34-2013 of the Government Procurement Policy Board, there were still several irregularities in the mode of procurement of the POL products.

Resolution No. 34-2013 gives government agencies involved in disaster response the power to resort to emergency purchase instead of holding public bidding.

The COA pointed out that the procurement of the POL products was done through a  “repeat order.”

“Moreover, it was observed that the contract of agreement for the repeat order was approved on Sept. 30, 2013, which was a month ahead of the approval of the MOA (between AFP and OCD),” the COA said in its report.

“Moreover, copies of the contract and the required documents were not submitted to the Office of the Auditor for review,” the report added.

The COA said three supplemental contract agreements were also left undated preventing the state auditors from ascertaining their actual dates of approval.

The COA said the AFP also failed to submit supporting documents in relation to the original contract for the POL purchase such as general conditions, special conditions, schedule of requirements, technical specifications, notice of award, and notice to proceed.

The COA has also required the AFP to submit an explanation on why it resorted to “repeat order” mode of purchase and as to why the date of the procurement contract preceded the date of the QRF fund transfer, but the AFP has yet to give any explanation.

“Until the end of the year, however, no action was taken on the requirements,” the report read.

The COA noted that the AFP, in an exit conference held on June 17, 2015, turned over to the audit team several documents pertaining to the POL purchase, but the much more relevant documents such as notice of award, notice to proceed and delivery receipts, have yet to be submitted.

GMA News Online was still trying to get a reaction from the AFP as of posting time. — RSJ, GMA News