COA upholds Makati’s stand against paying P89.8 M to drug firm

Published April 22, 2018, 12:05 AM

by Mario Casayuran and Vanne Elaine Terrazola

By Ben R. Rosario

A pharmaceutical firm lost over P89.8 million in medical merchandise after the Commission on Audit (COA) upheld the Makati City government’s stand to deny payment for the medicines it supplied to indigent city residents.

In a recently released decision, the COA Commission Proper denied the appeal of Planet Drugstore Corporation (PDC) for payment of a total P89,875,657.27 representing the cost of medicines and pharmacy services for the Libreng Gamot sa Makati program of the city government that was implemented from October to December, 2015.

In effect, the three-man COA panel headed by Chairman Michael Aguinaldo overturned the decision of the resident  city auditor and the officer-in-charge of the Local Government Sector (LGS) of COA-National Capital Region who both upheld the right of PDC to collect an additional P89.8 million representing the unpaid portion of P139,715,079.04 deliveries of medicines and pharmacy services.

COA records showed that PDC, through its president Erwin J. Zshornack, petitioned the audit agency to grant its claim for P89.8 million after a case for money claim it filed was upheld by lower COA bodies.

In its ruling, the COA stated that the medicines delivered in excess of the P49,850,000 supply contract that Zschornack and city officials approved “were not covered by the contract.”

“Moreover, there was no appropriation for the excess since the ABC (approved budget for the contract) was only P50,142,566.16,” the COA-CP explained.