The Commission on Audit (COA) has questioned the provincial government of Catanduanes over the P41.26 million paid for abaca suckers which were not delivered by the contracted supplier who simply gave cash to farmer-beneficiaries to source out the planting materials themselves.
In its 2023 annual audit report, COA said that Catanduanes paid P41.26 million to a supplier despite non-compliance with the original terms of the supply contract..
It said that in 2022, Catanduanes entered into a memorandum of agreement with the Department of Agriculture (DA) for the revitalization of Typhoon-Damaged Abaca Farms in the province for P69.9 million. The project involved the procurement and distribution of abaca planting materials (suckers), digging bars, and backpack spray to qualified farmer-beneficiaries.
After two failed biddings, COA said that Catanduanes resorted to negotiated procurement on May 17, 2023 for the supply and delivery of abaca suckers. It was awarded to an unnamed supplier on May 23, 2023.
It said the supplier agreed to deliver 1,377,700 pieces of abaca suckers to Catanduanes for P41.26 million within 120 calendar days. There were two deliveries made on Sept. 4, 2023 and Oct. 5, 2023, and two payments amounting to P19,319,511.70 dated Sept. 14 and Oct. 23, 2023 were subsequently made to the supplier.
COA said its auditors discovered "inconsistencies" in the transaction.
"Audit of the transactions revealed that there was no actual delivery by the supplier of 1,377,700 pieces of abaca suckers to the Provincial General Services Office (PGSO), subsequently to the Provincial Agriculture Services Office (PASO), as opposed to the certification in the Inspection and Acceptance Report Nos. 09-715 and 10-947 signed by the inspectorate team and the head of the PGSO indicating complete delivery thereof," COA's report stated.
"The supplier did not actually perform the agreement stated in the contract for the supply and delivery of abaca suckers given that the abaca suckers were sourced from the abaca farmers/beneficiaries themselves, and not through the capacity of the supplier," it added.
It also said that state auditors questioned the Terms of Reference (TOR) entered into by the local chief executive (LCE) and the supplier since there was a clause that seemed to modify the original terms of the contract agreement.
"The TOR executed by the LCE could have impacted the fairness of the procurement process, particularly the clause requiring the winning supplier to source out the abaca suckers from beneficiaries and not through the individual capacity of the supplier, thus giving him undue favor," the report said.
"Had the TOR been disclosed and set forth to all potential suppliers throughout the bidding process, it could have altered the outcome of the procurement," it said
When the audit team questioned 2,234 farm beneficiaries and recipients to determine whether there was actual delivery made by the supplier, state auditors learned that all of them only received P1,700 cash payment for 100 pieces of abaca suckers to be planted in their respective farms. None of them received any actual delivery from the supplier, it said.
The COA said that P1,700 cash translated to P17 per abaca sucker. Had the province taken over the distribution of cash payment instead of relegating the task to a supplier, they could have saved P12.95 per piece or a total of P17,841,215, it pointed out.
"Granting that management's distribution of cash to buy the farmer-beneficiaries' planting materials in lieu of delivery and distribution of abaca suckers was made in good faith, there were no submitted documents to prove that the total number of 1,377,700 abaca suckers were actually and completely planted in the respective abaca farms of 13,777 recipients," COA pointed out.
COA reprimanded the provincial government for giving unwarranted benefits to the supplier and causing undue injury to the government due to the non-delivery of the abaca suckers resulting in the inability of the government to implement the project in accordance with the contract agreement.
On top of requiring the province of Catanduanes to justify the award of the contract, it sought an impartial investigation to determine liabillity of provincial officials and personnel responsible for the transaction.
"Consider blacklisting the supplier for violation of the contract" and "imposition of liquidated damages," COA stressed.