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COA flags questionable transactions, fabricated bid documents in Marcos' Ilocos Norte

Metro Manila (CNN Philippines, July 4) — The Ilocos Norte provincial government has millions in questionable transactions and fabricated bid documents, according to the Commission on Audit (COA).
The discrepancies were detailed in an annual audit report. They include the supposed fabrication of bid documents worth ₱21 million and doubtful purchases and deliveries worth ₱154 million.

The COA asked Governor Imee Marcos to address their concerns within 60 days from receipt of its letter, dated June 21.

CNN Philippines has reached out to Marcos for comment.

Marcos, whose brother Bongbong is pushing his bid for the vice presidency, was also previously under scrutiny for the alleged misuse of ₱66.45 million in tobacco funds to purchase 40 minicabs and 70 mini trucks.

Here are the major findings of the 2017 COA audit report.

Fabricated bid documents worth ₱21.76 million
The COA reported that procurements in Ilocos Norte had Invitation to Bid reference numbers that actually belonged to other government agencies.

This was "a clear manifestation of the fabrication of documents to support the disbursements (or) payments of the suppliers (or) contractors," COA wrote. It also cast doubt on the whole bidding process and the legality of payments.

The report presented two tables, one detailing questionable transactions worth ₱18.83 million in 2016 and another worth ₱2.9 million in 2017. The amount totalled ₱21.76 million.

Documents from 2016 were all allotted for the procurement of drugs and medicines in the province, while those in 2017 listed bids for the procurement of tarpaulins, construction materials, IV fluids, and veterinary supplies.

The COA said the false reference numbers "imply that there were no actual invitations made to prospective bidders," which violates an implementing rule and regulation of the Government Procurement Reform Act. It also casts doubt on the legality and validity of the disbursements.

The numbers were stated in printouts from the Philippine Government Electronic Procurement System (PhilGEPS), the portal for information on government procurement. COA found the other agencies through the PhilGEPS database.

It deferred to the Bids and Awards Committee to properly see through the provincial government's procurement process.

"We also recommended that concerned (or) involved officials and employees on the misrepresentation of documents be investigated and be subjected to appropriate legal charges," the audit report said.

A provincial government note included in the report said that an investigation was underway.

Doubtful purchases worth ₱154 million
The COA called out "doubtful purchases" of goods for distribution that totaled ₱154 million. This was composed of ₱69.4 million spent in 2016, and ₱84.7 million the following year.

However, the government did not attach any distribution lists, "casting doubt as to completeness of deliveries made."

"Also, the absence of distribution list makes verification difficult, if not impossible," COA added.

A remark from the Ilocos Norte government stated it submitted distribution lists on payments worth ₱43.67 million. An auditor's rejoinder asked it to complete the lists as soon as possible.

The report also noted a "staggered purchase of medicines" worth ₱17.9 million. It said these piecemeal buys went against the procurement law and a COA circular, and it "[evaded] a more economical, effective and efficient manner of procurement, resulting in the possible loss of government funds."

A provincial government note stated it made the purchases at various periods "depending on the need of the hospitals" and because of expiry dates. It maintained it followed procurement rules and no extra expenses incurred.

The auditor's reply referred back to the finding that some bids had fake reference numbers.

Incomplete inventories?
The COA said the local government did not conduct physical count of inventories held for consumption, which included office, food, medical, and agricultural supplies.

The inventories, which totaled over ₱125 million, were not checked for completeness and condition, resulting in the possible loss of government funds due to overstocking and deterioration.

The agency added the required three-member inventory committee to conduct physical count on the supplies was non-existent. The inventory custodian also did not maintain any report or list of goods procured for storage.

"Neglecting the periodic conduct of physical count of inventories and non-maintenance of necessary records, therefore, resulted to unreliable balances and doubtful existence and condition of inventories, hence affecting the fair presentation of financial statements," COA said.

In response, the Ilocos Norte government said it will establish an Inventory Committee that will conduct a physical count every six months. It added there was no overstocking of inventories, and that supplies were not obsolete.

Multi-cabs and mini-trucks
The controversial multi-cabs and Foton mini-trucks procured in 2012 were not registered with the Land Transportation Office. They were also not insured, which is required by Property Insurance Law.

The vehicles were supposedly transferred to certain barangays, but the COA did not find any acknowledgment receipts for equipment. As a result, there was no clear ownership or accountability for the vehicles. Barangay funds could not be used for the fuel and maintenance expenses.

The officer-in-charge of the Government Services Offices said he is now waiting for the issuance of the official receipt and certificate of registration. The vehicles will then be insured to the Government Service Insurance System.

Other findings
The COA also enumerated other questionable transactions and activities.

Among them was the procurement of diesel and premium from Total (Philippines) Corp. through direct contracting. However, that form of contracting is only allowed under certain circumstances in the procurement law.

The law also disallows the reference to specific brands, which COA noted was not followed with some supplies and equipment. The report said this meant "the most advantageous price for the government could not be attained."

The ₱4.1 million-worth Mangrove building, which was a tourist destination, had been unutilized, which the COA said was "a manifestation of imprudent planning of management, hence the wastage of government funds."

However, the Ilocos Norte government said the fuel was purchased from Total in a special and exclusive offer that reduced costs.

The provincial accountant explained the brands they chose were "reliable yet inexpensive," adding there was no intention to put any advantage on the purchased brands over others.

The provincial engineer, however, said the Mangrove building is just the first phase of the government's plan, which includes the construction of at least six more facilities.

CNN Philippines Senior Researcher Ella Hermonio contributed to this report.

COA flags questionable transactions, fabricated bid documents in Marcos' Ilocos Norte COA flags questionable transactions, fabricated bid documents in Marcos' Ilocos Norte Reviewed by AsianPolicy.Press on 2:49:00 PM Rating: 5

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