Pharmally auditor admits never seeing documents supporting firm's purchases

After several hearings, the external auditor of Pharmally Pharmaceuticals Corp. on Tuesday admitted that she never saw the invoices for the firm’s P7.2 billion purchases and donations in 2020.

“Hindi po, listahan lang po talaga [I didn’t see them, I only saw a list],” Pharmally's external auditor Iluminada Sebial said during the continuation of the Senate hearing into the alleged overpriced medical supplies procured by the government from Pharmally.

The senators were trying to determine if Pharmally, a small firm that bagged billions of pesos worth of government contracts last year, paid the proper taxes.

Sebial said she marked the financial statement prepared by Pharmally as fairly presented in all material aspects without seeing the supporting documents. She said the statement was already prepared when it was handed to her.

“One-time engagement lang po ako. Tapos naka-prepare na po ng accountant. Chineck ko lang po,” she said.

(It was a one-time engagement. The document was prepared by the accountant already. I just checked it.)

“Pero hindi po ako nakakuha ng mga dokumento. Sabi po papadalhan nila ako pero ngayong imbestigasyon hindi po ako nabigyan ng kopya,” she added.

(I didn’t receive the documents. They said they will send it to me but until now I was not given a copy.)

At present, Certified Public Accountant Raymond Abrea, a resource person, said the only document given by Pharmally to the Senate is the delivery receipts for their sales.

He said they have not submitted their subsidiary ledgers, sales invoices or official receipts, summary list of sales, BIR Form No. 2307/2306 for their sales.

The company has also yet to submit supporting documents in connection with the government's purchase of medical items.

Senators had previously warned Sebial that she could lose her license over “inexcusable negligence” in examining the firm’s financial statements.

Senator Richard Gordon, chairman of the blue ribbon committee, told Sebial is being "exploited" by Pharmally officials.

"For your sake, I'm appealing to you huwag kang tumanggap ng kasalanan na hindi mo kasalanan. Pinagsamantalahan ka lang. You owe these people nothing as far as I'm concerned," Gordon told Sebial. 

Subject to tax

According to Abrea, should Pharmally and its suppliers fail to provide supporting documents, they may need to pay the Philippine government up to P2 billion in taxes.

“Base po doon sa nadeklara sa financial statement whether tama po ito o mali, dahil ito po ay napirmahan at nasumite, subject po sa perjury ang management at ang auditor, aabot po siguro sa mga P2 billion in taxes,” he said.

“Halo-halo po ito, income tax, value-added tax, documentary stamp tax, improperly accumulated earnings tax, pati po donors tax sa lahat ng nadeklara sa audited financial statement,” he added.

(Based on what was declared in financial statement, whether it was accurate or not, the firm is liable for taxes up to P2 billion. These include income tax, value-added tax, documentary stamp tax, improperly accumulated earnings tax, even donors tax.)

Without the supporting documents, Abrea said Pharmally and its suppliers may also be charged with tax evasion.

Senators have been scrutinizing the purchases of COVID-19 supplies made by the Department of Budget and Management-Procurement Service last year, during which Pharmally bagged more than P8 billion in government contracts.

President Rodrigo Duterte has banned executive department officials and employees to stop attending the investigation, a move lawyers said “upsets our systems of checks and balances.” —KBK, GMA News