THE Commission on Audit has warned the Cebu Port Authority (CPA) of sanctions for continuing to ignore recommendations to secure the prior approval of the Department of Budget and Management (DBM) for its bus rental/shuttle service contracts.
Auditors noted that since 2015, the CPA has repeatedly renewed its lease of shuttle buses from the Chins Six Eleven International Sales, including the most recent one worth P32 million in 2022.
The ports agency was told to review whether resorting to the rental of motor vehicles was more advantageous to the government than purchasing a bus fleet. Filing a request for authority with the DBM would have opened the issue for evaluation.
The CPA’s contract with China Six Eleven involves 13 buses deployed for five hours daily, including a driver, fuel, and the maintenance cost of each unit.
“It was noted that the transaction was without the mandated authority from the DBM, considering that this is for the whole year and thus exceeded the 15-day threshold under the DBM Circular,” the COA noted.
The CPA had invoked exemption from seeking DBM approval on the ground that the transaction was a “procurement of goods and services” rather than a rental/lease of motor vehicle since the supplier provided the drivers and maintenance crew.
“Despite the above justification, the audit team maintains the need for authority to lease motor vehicles from the Secretary of Budget and Management. The service portion of the contract is negligible and incidental only to the entirety of the transaction,” the COA stressed.
Also questioned in audit was CPA’ separate rental of patrol boats for 2022 to the tune of P9.88 million.
“(T)he said rental of a motor vehicle (patrol boat) was without the mandated authorization from the Secretary of Budget and Management. The said authorization is required pursuant to Section 76, Chapter 7, Book VII of Executive Order 292,” the COA pointed out.
Again, the CPA raised the same argument that it entered into a procurement deal for services — not a vehicle lease – since the boats are operated by the service provider.
“We enjoin Management to immediately secure the authorizations to rent motor vehicles, otherwise, the audit team would be compelled to issue further audit action on the said transaction,” the COA warned.
In its comment, the CPA management conceded the issue to COA and said it will comply with the audit recommendation.
