THE Commission on Audit has demanded an explanation from the Canlaon City government after discovery of procurement transactions showing it paid more than twice to almost thrice the suggested retail prices (SRPs) of various medical supplies in 2020.
Government auditors tracked six separate supply contracts that showed “possible overpayment” — four with Vishelee Marketing and two with Health Med Pharmacy and Distributors.
The transactions took place between May 27 and July 29, 2020 with a combined cost of P4,094, 313.
This meant every single one was approved by the city’s Bids and Awards Committee after the Department of Health had already issued Circular No. 2020-0186 on April 15, 2020 ordering a “price freeze” on all essential emergency medicines and medical devices due to the COVID-19 pandemic.
“The price variance ranged from 16.88 percent to more than 196 percent which can be considered excessive. Considering the said procurement was made after the releases of the issuances for the price reference, the City could have used the same to procure the items at prices most advantageous to the government,” the COA said.
Auditors said the city bought 270 gallons of 70 percent rubbing alcohol from Health Med Pharma in two batches paying P1,300 per gallon against the DOH SRP of only P650. Even with the maximum allowable markup, the COA said the cost should not have exceeded P715 per gallon.
Two batches of N95 masks purchased from Vishelee Marketing were paid at P330 each on May 15, 2020 and increasing to P495 each on July 17, 2020 — in just two months.
The audit team noted that per SRP set by the DOH, the masks should have been available at only P152 each and P167.20 with markup. This meant the city paid 97.4 to 196 percent above SRP.
Also questioned were goggles obtained at P575 each against the SRP of P180 to P198 or an overprice of 190.4 percent; face shield at P300 each compared to the SRP of P124.80 to P137.28 or an overprice of 118 percent; PPE sets at P2,200 each as opposed to SRP of P1,200 to P1,320 only or a price variance of 66.67 percent.
“We recommended that management require the Bids and Awards Committee to submit a justification to prove the reasonableness for the procurement of the aforecited items above the suggested retail price of the DOH,” the COA said.
