THE Commission on Audit has flagged 44 lease contracts worth P10.85 million entered into by the Public Attorney’s Office (PAO) in 2019 for failure to comply with the Implementing Rules and Regulations (IRR) of RA 9184 or the Government Procurement Reform Act.
The audit report released on August 12 also questioned the procurement of supplies amounting to P5.3 million that was reportedly paid a month ahead of delivery, contrary to Presidential Decree No. 1445 or the Government Auditing Code of the Philippines which prohibits advance payments.
Government auditors said the 44 contracts of lease for office spaces in PAO’s regional and district offices were not supported by required documents under RA 9184 such as invitations to at least three prospective lessors, abstracts of bid/quotations, bid proposals, report on the evaluation of the reasonableness of price, Bids ad Awards Committee resolutions recommending award of the contract, cost-benefit analysis, and multi-year contract agreements.
“Our review of the 44 contracts of lease totaling P10,847,260.01 revealed that the pertinent documents were not attached to the contracts which should form an integral part thereof,” the audit team said.
It also noted the absence of proof that PAO made any attempt to compare prevailing rental rates in the area in relation to 39 extended/renewed lease contracts.
“In renewing its contracts, the agency simply entered into a new contract with the private lessor without conducting the cost-benefit/market analysis required in the existing regulation,” the COA said.
On the other hand, 11 multi-year lease contracts were found to be unsupported by the required authority from the Department of Budget and Management as prescribed under National Budget Circular No. 577.
“While it is not prohibited for agencies to enter into multi-year contracts, it must first seek an authority from the DBM and subject to the rules that govern multi-year contracts,” auditors pointed out.
Also the subject of a separate adverse observation was PAO’s purchase of P5,299,629.55 worth of office supplies, equipment, and furniture and fixtures in the last month of 2019.
Based on purchase orders, the obligations were incurred in December and payment through checks were made on December 18 and 19, 2019. However, the dates of delivery showed these happened between January 15 and 30, 2020.
“The payment made in CY 2019 for supplies and materials delivered only in January 2020 partakes that nature of advance payment which is contrary to Sections 58, 61, and 88 of PD 1445,” the COA said.
The PAO management said it will require the regional and district public attorneys to comply with the documentary requirement under RA 9184 in connection with the 44 lease contracts.
On the reported advance payments however, the agency clarified it merely prepared the checks in advance but actual release was made only once full delivery was made.