State auditors reminded Food Terminal Inc. (FTI) to submit to the Commission on Audit (COA) copies of contracts, purchase orders and required supporting documents on time.
In a 2014 audit report on FTI, the commission said procurement contracts amounting to P67.101 million were only submitted for technical, legal and auditorial review after 77 to 469 days from their perfection.
This was “contrary to COA Circular No. 2009-001,” the auditors said.
Under the COA circular, a copy of the contract and all the documents forming part of it shall be furnished to the auditor of the agency concerned within five days from the execution of such contract and issuance of a purchase order by the government or any of its agencies, including government-owned and -controlled corporations (GOCCs).
“Evaluation of the agency’s compliance with the prescribed period of submission to COA of perfected contracts including supporting documents during the year showed, however, that it was not able to submit copies of the contracts and required supporting documents within five days after execution or issuance,” auditors said.
“The submission of copies of contracts totaling P67.101 million to the COA auditor were delayed from 77 to 469 days, while there were no copies of contract and supporting documents submitted to COA or attached to the DVs [disbursement vouchers]for payments made for the negotiated contract of P1.339 million for the Transfer and Construction of FTI-Special Economic Zone,” they added.
Based on the audit report, contracts with delayed submission to COA included a P1.31-million deal for the Re-looping of Waterline at FTI that was due for submission on December 11, 2013 but was submitted on March 25, 2015.
Also, a P9.58-million deal for the Construction/Improvement of Gravity Sewer Line at FTI due for submission on June 3, 2014 was submitted only on November 6, 2014.
Also included was a P1.5-million deal for the Hiring of Contractor for Garbage Collection and Disposal Services for calendar year (CY) 2013 to 2014 and a P2.6-million deal for the Hiring of a Custodial Maintenance Services Provider for CY 2013 to 2014.
Both were supposed to have been submitted on October 8, 2013 but were submitted only on February 27, 2014.
A P1.72-million deal for the Installation of Wireless Cameras at FTI-SEZ that was supposed to have been submitted on December 8, 2014 was submitted on April 15, 2015.
A P40.56-million deal for the Improvement/Construction of Portion of Cucumber Road including Drainage System and Slope Protection (Phase 3), which was supposed to have been submitted on June 21, 2013, was submitted only about three months later.
And a P9.8-million deal for the Construction of Perimeter Fence at FTI-Special Economic Zone (SEZ) was supposed to have been submitted on November 28, 2014 but was submitted only on February 13, 2015.
“As the required documents were not submitted within the prescribed period, the technical, legal and auditorial reviews of such contracts were not timely conducted,” the auditors said.
On further review of contracts, they found that there were no letters of invitation to other observers as required by the revised implementing rules and regulations (IRR) of Republic Act(RA) 9184 or the government procurement law, “Thus, casting doubts on the transparency of the procurement activities undertaken.”
Observers were limited to the COA representative and FTI Audit Specialist, the state auditors said.
“This is contrary to Section 13.1 of the Revised IRR of RA 9184, which requires that the Bids and Awards Committee (BAC) shall in all stages of procurement process, invite, in addition to the representatives of COA, at least two observers, to enhance the transparency of the process,” they added.
Under the law, the BAC shall in all stages of the procurement process invite at least two observers, who shall not have the right to vote, to sit in its proceedings in addition to the COA representative.
One shall come from a duly recognized group in a sector or discipline relevant to the procurement, and the other shall come from a non-government organization.
Auditors then recommended FTI to require the vice president concerned to adhere to the provision of COA Circular No. 2009-001 on the submission of copies of contracts, purchase orders and the required supporting documents for timely review and evaluation, as well as to “Remind the BAC to observe the requirements of RA 9184 including its Revised IRR.”
FTI commented that it is almost impossible for it to strictly comply with the five-day period requirement under the COA circular,, “given the fact that the functions of the FTI-BAC is over and above the equally important day-to-day function of the members and secretariat with the company. Nonetheless, the FTI management committed to exercise diligent efforts to comply with the required number of days of submission under COA Circular No. 2009-001.”
In response, the auditors said, “Since there are only few procurement projects, the FTI-BAC should provide importance in the preparation and submission of bid documents. Nevertheless, we appreciate FTI’s commitment to exercise diligent efforts to comply with the required number of days of submission under COA Circular No. 2009-001.”
FTI is attached to the National Food Authority (NFA) by virtue of Letter of Instructions 1013 issued on April 19, 1980 and was made its subsidiary on January 14, 1981 under Presidential Decree 1770.
FTI’s vision is to be a leading government corporation providing prime location and quality services for businesses.
Its mission is to be a strategic partner of the business sector by creating a conducive business environment.
To carry out its purpose, FTI constructs and maintains buildings and stalls and rents them out to persons and various corporations.