The Commission on Audit has questioned the “validity and propriety” of the Land Titling Computerization Project (LTCP) of the Land Registration Authority (LRA)that lacked approval of the President and allegedly deprived the government an estimated P3.12 billion in possible income.
COA has questioned the Build-Own-Operate Agreement (BOO) for the implementation of the LTCP that has so far earned for the private partner of the LRA some P21 billion in just 10 years.
The audit agency’s observations are contained in the recently-released 2019 LRA annual audit report submitted to LRA Administrator Renato Bermejo by COA Director Michael Bacani.
The LTCP introduced the automation of the functions and processes and standardization of the registration procedure for land registration in the country.
COA said the BOO between the LRA and the Land Registration Systems Inc. (LARES) lacked the mandatory approval of the President as required under Republic Act 77198.
“Other necessary documentary requirements were likewise not submitted to the Office of the Auditor, thus, validity and propriety of both the BOO and the corresponding IT service fees collected and released by LRA to Lares, Inc. amounting to more or less P20 billioin out of the P21 billion, as doubtful,” COA stated.
The BOO was originally entered into by LRA with the Stradec FF Cruz and CONFAC (SUFC) Consortium, now LARES), in 2000 for the implementation of the agency’s Information Technology Network and Database Infrastructure Project.
In a special audit on the contract that was conducted by COA from 2004 to 2005, the audit agency concluded that the LTCP “was not efficiently and effectively implemented and the interest of the government and the public was not adequately protected” due to the delay in its implementation.
In the 2015 annual audit report, COA observed that various documents covering the BOO were not certified true copies, including the presidential approval of the agreement through then Executive Secretary Ronaldo Zamora.
In 2019, COA sought confirmation of the presidential imprimatur of the agreement but Malacanang was not “able to provide positive confirmation on the authenticity of the presidential approval dated July 31, 2000” that was ostensibly signed by Zamora.
Originally costing just P3.483 billion, the project was able to earn P21 billion, P20 billion of which was released to LARES.
The LRA management took exception to COA’s doubts on the validity and propriety of the BOO agreement is”without factual and legal basis”.
Officials of the agency also pointed out that all BOO Contracts are presented to the president through the National Economic Development Authority.
“Since the President chairs the NEDA Board, NEDA Board approval already carries with it the president’s approval,” the LRA argued.
In the same audit report, COA disclosed that the LRA has failed to incorporate amendments to the agreement with LARES for the provisions of reasonable rate of return (ROI) to ensure that “no unwarranted benefit is given to the LARES” at the expense of the public.”
“Likewise the absence of a revenue sharing arrangement deprived Government of more or less P3.12 billion of possible income,” the state audit agency noted.
Audit examiners stressed that LRA has continuously failed to assess the “extent of recoupment of the investment” relative to the total IT services fee imposed and collected. They said this is”detrimental to the paying public which the government ought to protect.”
COA also assailed LRA for allowing the use of 12 “outdated” network switches, “causing security vulnerability and possible performance defect due to bugs.”
Further, only two out of 10 software licenses were used for the project.
Among the outdated software installed was the Kaspersky Security version 10.0.0.485.