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OVP 'failed to observe procedures' in creation of satellite offices —COA

The Commission on Audit (COA) has flagged the OVP for over P600,000 worth of purchases for its seven satellite offices, which it said were non-compliant with the Procurement Law or Republic Act 9184.

“Our audit disclosed that OVP failed to fully observe the processes and  procedures required under the RA 9184 and its IRR in the purchase of its Property Plant and Equipment (PPE) and Semi-Expendable Equipment in satellite offices totaling P668,197.20," state auditors said in their 2022 Annual Audit Report.

"The immediate establishment of satellite offices without enough equipment to operate led to Management’s decision to resort in immediate purchase of PPE and semi-expendable property using the cash of its officers, which the OVP subsequently paid through reimbursement,” they added.

COA added that although a quotation was attached ensuring that the lowest price was obtained in the market, "OVP’s failure to undergo these purchases in processes and procedures required under RA 9184 and its IRR defeats the purpose of the Procurement Law, which is to standardize and to improve transparency in the procurement process."

Likewise, COA invoked Section 10, Article 4 of the Procurement Law which states that “all procurement should be done through competitive bidding, except as provided for in Article 16 of this Act.”

Article 16 of the Procurement Law allows Alternative Methods of Procurement in order to promote economy and efficiency but this is still subject to the prior approval of the Head of the Procuring Entity or his duly representative, and whenever justified by the conditions provided under the Act.
In addition, the Audit Team also noted that the control reference of Inspections and Acceptance Report (IAR) as well as date of Inventory Custodian Slip (ICS) and Property Acknowledgment Receipt (PAR) showed that purchases were reported only to Property Unit one to three months after its purchase which leads to the accountability over the property not being immediately established.

“As per inquiry, the immediate establishment of satellite offices was made due to Management’s intention to immediately expand services offered by OVP to various provinces. However, controls to ensure that government resources were utilized as intended and prevented from loss should also be considered,” state auditors said.

“The immediate establishment of OVP’s satellite offices without standardized and streamlined processes in handling and reporting of acquired PPE resulted in late reporting and recording of purchased property,” COA added.

COA said the OVP agreed to the following recommendations to stop procurement transactions that resort to reimbursement as it defeats the purpose of the Procurement Law.

The commission also advised OVP to strictly adhere to the provisions of the law and to properly plan and schedule the procurement of PPE and Semi Expendable Property and to standardize and streamline processes on procurement, handling and  reporting of property acquired in the satellite offices,

The OVP also acknowledged that some of the purchases made for the satellite officers were done through reimbursement and vowed to do better.
Asked to comment on the COA report, OVP spokesperson Reynold Munsayac told GMA News Online, "We will just release a statement once available."

Confidential expenses

In the same annual report, COA said that the OVP spent P125 million worth of confidential expenses in 2022.

COA mentioned the said expenses in its 2022 annual audit report under Notes to Financial Statements on the office.

The OVP did not have an appropriation for intelligence or confidential fund under the General Appropriations Act of 2022.

The office also spent P483,600 in "extraordinary and miscellaneous expenses."  The item had an appropriation of P620,000 in the 2022 budget.

As part of its assistance to sectors, the OVP transferred P30.5 million to various hospitals for medical aid, a figure 81% lower than the P167 million spent by OVP for the same purpose in 2021.

OVP also posted decreased spending in medical/burial assistance in 2022 at P304.67 million, which is lower than the P327 million spent in 2021 for the same purpose.

The said office, however, increased spending on sustainable livelihood and subsidy on training assistance in 2022 at P20 million, up from P7.43 million in 2021.

It also spent a larger amount for educational assistance at P936,121 which is a huge increase from P35,000 in 2021.—LDF, GMA Integrated News