The Commission on Audit (COA) backed President Rodrigo Duterte who ruled out corruption in the purchase by the Procurement Service (PS) of supposedly overpriced face masks and face shields last year.
However, COA still faulted the agency for failing to re-sell the over P113.95 million worth of face masks and face shields it procured at a time that the prices and demand were still high from May to September, 2020.
“More than the income generated, the PS could have served fellow employees/healthcare workers through he delivery and sale ot these items during the time these were badly/urgently needed,” COA said in the 2020 Annual Audit report for the PS, an attached agency of the Department of Budget and Management.
In a taped speech aired Saturday, Duterte disputed claims by certain senators that the bulk procurement of the face masks and face shields was tainted with corruption. The said procurement, mainly by the PS, was questioned during a Senate hearing for carrying tag prices that were way above the current retail prices of the said items.
It was reported that face masks and face shields were purchased by government at P27.72 and P120, respectively, per piece. Under current prices, a face mask cost P2 or lower while face shields can be purchased in retail stores at prices ranging from P8 to P20.
The 2020 AAR revealed that state auditors had inquired into the purchase of the said items falling under the category commonly-used supplies and equipment (CSE) after client-agencies of the PS questioned the selling prices for the items.
Last year, the PS spent P113,950,000 to purchase face shields through negotiated procurement, apparently skipping the conduct of public bidding due to the prevailing state of emergency. Also procured then were P1,317,711 worth of face shields.
“Review of transactions, disclosed that during the onset of the outbreak of Coronavirus Disease 2019 (COVID-19), the demand of surgical msks was so high that scarcity of supply raised the price,” COA said.
“Such scarcity prompted PS to resort to procure surgical masks and face shields in bulk orders,” the audit agency stated.
State auditors pointed out that in DOH Department Circular No. 2020-0142, the suggested retail price of face masks “was as high as P28.00.” The circular was released at the height of the COVID-19 pandemic upsurge in March 2020.
“The face shield, price quotations of the local traders was P120.00 per piece,” the 2020 AAR stated.
“The cost of P28.00 and P120.00 per piece was used by PS in market surveys for its negotiated procurements. The cost per piece in the Purchase Orders (POs) for surgical masks ranged from P13.2050 to P27.72,” COA said.
Currently, the public safety items are being sold at prices way below the procurement cost.
“If PS had delivered all of the items when the demand was high, these items could have been sold immediately at a selling price at par in the market in the total amount of P99.274 million,” said COA.
Audit examiners disclosed that it was only in September 2020 that the DOH updated the SRPs.
Had PS disposed of the items from May 2020 to September 2020, the agency could have sold “the tiems at par in the market.” Auditors lamented that the PS was unable to re-sell the stored face shields and face masks at the end of 2020.