The Intramuros Administration could have earned some P1.176 million more had it been able to renew lease or contract deals with tenants or lessees of commercial spaces, according to state auditors.
Based on the 2015 audit report of the Commission on Audit (COA) on the Intramuros Administration, the contracts or lease agreements expired in 2010.
The auditors said management allowed all its tenants and lessees to operate businesses in the commercial spaces located within the Intramuros area without valid contracts or legal basis.
Upon validation, COA found that the Intramuros Administration failed to renew the lease contracts or agreements because the proposed rate increase and lease guidelines were still for presentation and approval by the Board of Administrators.
With the expiration of the contracts, management should have conducted a public bidding in order to obtain the reasonable and/or competitive rates on the commercial spaces within Intramuros, the auditors said.
Since 2010, the lessees were still charged with the same rates providing a rent income of P980,335.50 per month or a total of P11,764,026.00 per year instead of P1,176,402 per month and P12,940,428.60 per year computed with a reasonable increase of 10 percent per year,” they added.
Based on the audit report, the Commission on Elections (Comelec) which holds office at the fifth floor of the Palacio del Gobernador paid the highest rent of P310,546.50 per month.
Jollibee Foods Corporation in Cantinas de Aduana came second with P176,000 per month, followed by Barbara’s Restaurant at the PSL Complex with P175,700 per month.
The other tenants/lessees, including those in Fort Santiago and in stalls at the PSL Complex and Tiendas del Parian, were: Angeli Digneneng, Barbara’s Restaurant (three stalls), Caruaje, Eduardo Eugenio at the NIA Compound; Gloria Barican, Janice Balita, Jasper Ano-os, Joederick de la Cruz, John Charles Celdran, Jose Mari V. Lacson, Li Hua Tan, Lorna Manaay, Lourdes Apostol, Luisa R. Cabuhat, Lush Enterprises Corp., Mary Ann Gonzales-Sotelo at the Victoria Compound, Mary Jane Digneneng, Michael Centeno, Michelle Iris Tsai, Raphael Dy, Sebastian Tamayo, VACOOP, and Yslas De Oro Travel and Tour.
COA also recommended that management make a strong representation to the Board of Administrators for the approval of the rate increase, and for the chiefs of the Administrative and Finance and the Business Management Divisions to revisit the existing contracts.
For its part, the Intramuros Administration informed COA that it hopes to convene the Board of Administrators this month.
The agency said it is also developing a more dynamic business strategy with assistance from USAID. This involves a Geographic Information System (GIS)-linked visualization map of available spaces to improve the ease of monitoring and a comprehensive set of guidelines and principles for renting out these spaces.
In its 2014 audit report, COA said that the Intramuros Administration could have earned P6.28 million more had it renewed the lease contracts/agreements of tenants/lessees of commercial spaces as was recommended in a 2013 audit report.