RUSTY machinery, stale dairy, and empty shipping cartons are all that remained of the government’s two-year-old milk production project in Mindanao that was supposed to be a key contributor to the national feeding program.
Two years after transferring P28.62 million to its Mindanao field office to build and operate a sterilized milk plant (SMP), the National Dairy Authority (NDA) has thrown in the towel, saying it decided to stop to “avoid further losses.”
Government auditors are unhappy, noting that P7.59 million worth of new machinery is no longer being used after the initial run resulted in ruined milk due to bad choice of packaging material: the retortable pouches turned out to be defective.
“The implementation of the SMP project was stalled in July 2021 due to defects in the pouches that were procured for the production of pouched sterilized milk, with 40 percent of the production wasted,” the Commission on Audit said.
Not only did the NDA terminate the supply contract for the retortable pouches, it also shut down the entire plant. Immediately, P1.24 million in perishable raw materials went to waste.
Needing to move 7,225 kilograms of sugar and milk powder to prevent them from spoiling, the NDA said it decided to “lend” cooperatives and dairy partners. But without a written agreement clarifying the nature of the transaction, recovering the value of the goods is not unlikely, auditors said.
Cocoa powder, refined sugar, and while milk powder worth P866,375 were also left exposed to high temperatures in a container van, which the Commission on Audit said “may result in chemical, physical and bacteriological changes.”
Likewise, two million hard plastic straws and 36,000 shipping cartons are left idle deteriorating over several months.
“Due to the suspension of operation of the SMP after the first batch of milk production, …machineries and equipment in the total amount of P7.59 million were no longer utilized and/or remained idle,” COA said.
But more than the wasted raw materials and unused plant machinery however, the audit team said beneficiaries of the Masustansyang Pagkain para sa Batang Pilipino Act (RA 11037) in public schools under the Department of Education and the Department of Social Welfare and Development are also being shortchanged.
With the shuttered milk sterilizing plant now unlikely to resume operations, the COA told the NDA that the entire venture is now considered “unnecessary expenditure or use of government funds,” which would be disallowed in audit.
“We recommended that top management … consider imposing administrative sanctions against officials and personnel concerned, who were remiss in their duties that resulted in the wastage of government funds,” the commission said.
The NDA, however, defended the decision to halt plant operations citing “technical problems” in implementation.
It insisted that the project team’s call to shut down was “a good decision to avoid further losses.”
